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Multiple Choice Questions

Which of the following will not be included in Liability ...

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how is capital a liability

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Capital is money invested by owner in the business, whole accounting is done from the point of view business(as owner and business are treated separate), so capital is treated as loan by owner to business & hence liability.

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Then please explain how capital can be included in Liability

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Capital is a liability of the organization towards the owner. As per the business entity concept business and entrepreneur are different thus whatever money he invests in the business is to be paid back to him some day. Hence, it can be treated as a liability towards the owners

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