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Capital

Nishikant (Jalna) (298 Points)

30 November 2017

Dear Expert I'm literally confused We transfer business profit to capital account every year. My question is when used this capital in business and what is intention of capital in business

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Divakar (Student CA Final ) (11857 Points)
Replied 30 November 2017

Profit is addition of capital... When u required u invest this capital.. Just like fixed assets purchase.. Make any investment etc..

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Divakar (Student CA Final ) (11857 Points)
Replied 30 November 2017

Trough capital u can run ur business only

Nishikant (Jalna) (298 Points)
Replied 01 December 2017

Thank sir for ur valuable reply... but how to purchase fixed assets & investment by this capital

Divakar (Student CA Final ) (11857 Points)
Replied 01 December 2017

Profit is realised in cash... Invest ur capital.. Capital in form of cash or kind

Nishikant (Jalna) (298 Points)
Replied 01 December 2017

If my cash & bank Bal is 7 Lac but capital is 17 Then can I purchase a property more than 15 Lac

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Divakar (Student CA Final ) (11857 Points)
Replied 01 December 2017

Then what is ur source of finance... It may be loan... If u hv not sufficient cash & bank balance then how could u purchase that.. U can take loan

Divakar (Student CA Final ) (11857 Points)
Replied 01 December 2017

U can purchase any value of property... Just keep in mind that source of finance is accounted and not unaccounted money... U can take loan and purchase that property or sell ur fixed assets or investment and generate cash

Divakar (Student CA Final ) (11857 Points)
Replied 01 December 2017

What u r giving consideration that should be accounted money... Just take loan and buy the property if u hv not sufficient capital

Nishikant (Jalna) (298 Points)
Replied 01 December 2017

Sir Then what is role of capital in firm

Divakar (Student CA Final ) (11857 Points)
Replied 01 December 2017

Tell me capital in what form u hv.. U hv just 7 lakh cash & Bank.. Then bakance capital is?? and when u hv not sufficient cash then how could u purchase the property... Tell??

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Divakar (Student CA Final ) (11857 Points)
Replied 01 December 2017

Capital is invested in stock or fixed assets.. Or in investment.. When u go for buy a property u should hv accounted money

Nishikant (Jalna) (298 Points)
Replied 01 December 2017

Ok sir plz can u tell me how to capital invest in stocks & fixed assets

Divakar (Student CA Final ) (11857 Points)
Replied 01 December 2017

Its ur capital through which u are running ur business... Without investing in stock or fixed assets how could u run ur business

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Divakar (Student CA Final ) (11857 Points)
Replied 01 December 2017

Tell me ur exact problem... Then i can suggest u any solution... Either u can mail me at Cadivakarthakur92 @ gmail.com and contact at my whatsapp no 9968378334

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