Which Of The Following Statements Is (Are) Correct Regarding The Owner, Capital Account? (Check All That Apply.)
Capital account is increased on the right side of the T-Account
as it has normal balance on credit side, so when it increases, we credit it and
when it decreases, we debit it and recorded on the left side of its t-account.
In its t-account, the reason of its credited and debited are recorded i.e.,
when it increases, we record it on right side and enter other account (such as
cash, inventory) due to which it increases or credited and when it decreases,
we debit it and enter other account (owner’s withdrawals) due to which it decreased
or debited.
As, the owner’s capital account is the component / part of Owner’s
Equity Account, so it is an owner’s equity account and shown on the
liabilities & equity side of balance sheet. Actually, it is used in the
calculation of owner’s equity which includes capital at the beginning, net
profit or net loss for the period, additional investments, owner’s withdrawals
and capital at the ending.
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