Capital Account on the Asset Side
This query is : Resolved
17 October 2007
Can the capital come on the Assets side in case of a Sole Proprietorship Business?
18 October 2007
In the balance sheet of the Sole Proprietorship business, capital contributed to it by the proprietor can not come under the Asset side of the business as per accounting convention, for that is not the asset of that business but capital received from the proprietor.
In the balance sheet of the proprietor, the capital contributed by him to that business can be shown as asset.
S.Srinivasaraghavan
In the balance sheet of the proprietor, the capital contributed by him to that business can be shown as asset.
S.Srinivasaraghavan
18 October 2007
A Negative Capital can be a part of the Asset Side but that means that you are withdrawing Excess from your business and there are no Profits in the business.
But this is Against the Conventions
But this is Against the Conventions
18 October 2007
It will reflect more drawings rather than introduction of capital. It will not be healthy for the entity for good liquidity.
31 October 2007
if capital comes on asset side, it is overdrawings by the proprietor from the business, which is not good to the business.
08 November 2007
Capital Account on Assets Side reflects overdrawnings by Proprietor.
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