What is Capital In Accounting - Definition - Meaning - Examples - Explanation
Any amount which is invested by the owner of the business into the business is called capital in sole proprietorship type of business. The owner may invest Cash or Goods (Goods Purchased or Purchases ) to start the business. For example, if Mr. A, as a Sole Owner, invested Cash For Rs. 100000 to start the business on 1 st July, 2018. then here Capital is the right of the owner who invested in his business. The Accounting Journal Entry for Capital account is shown below: Capital Journal Entry Cash a/c 100000 Capital a/c 100000 (Cash invested into the Business to start it) Whe n Goods invested by the owner for Rs. 50000, then the journal entry is shown below: Purchases a/c 50000