• Answer of this question

    difference between capital and cash
    Davneet Singh's image
    Davneet Singh

    Suppose a person starts a business.

    He brings 40000 Cash and 60000 Furniture into Business

    In this case,

    Capital is money introduced by a person into business i.e.Rs 100000

    For the business,it is a liability as it has to be paid back to the person

     

    Also Cash and Furniture are Assets or property of business of 40000 and 60000 respectively

    Total Assets of Business=40000+6000=100000

    Total Liability of Business=Capital Introduced=100000

     

    Hence,in Accoutancy

    Total Assets=Total Liability

     

     


    Written on July 16, 2016, 6:41 p.m.