Equation

This query is : Resolved

Ashish Moses Frankey (Querist)
Follow

23 July 2014 I dont understand this equation Capital=Asset-Liabilites Liabilities=Asset-Capital .Please help me to understand this...

Vishnu Saboo

Vishnu Saboo (Expert)
Follow

23 July 2014 Balance sheet has two parts one is Liability and another is asset.
liability consist 1. capital - which brought by company/firm and 2. other liability like creditors, bills payables, and more.
so if you have been asked for Capital and total asset and other liability given than asset-other liability= capital.
if capital and asset given then Asset - Capital = Other Liabililty.
if Other liability and capital is given then Other liability + capital = asset.