BACHELOR OF BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION

FINANCIAL ACCOUNTING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Money invested in a business by an owner is called ____
A
merchandise
B
capital
Explanation: 

Detailed explanation-1: -The correct option is B. Capital. Amount invested by the owner in the business is called as capital.

Detailed explanation-2: -Share capital (shareholders’ capital, equity capital, contributed capital, or paid-in capital) is the amount invested by a company’s shareholders for use in the business.

Detailed explanation-3: -Capital or Equity The fund invested by the owner in the business or the net amount claimable by the owner from the business is known as the Capital or Owner’s Equity or Net Worth. Formula: Owner’s Equity = Assets-Liabilities.

Detailed explanation-4: -Definition: Owner investment, also called owner’s investment or contributed capital, is the amount of assets that the owner puts into the company. In other words, this is the amount of money or other assets that the owner contributes to the business either to start it or to keep it running.

Detailed explanation-5: -Capital in business refers to the sum of financial assets that are required to produce goods or services. These funds can be used to initiate operations, meet daily expenses or grow and expand the business.

There is 1 question to complete.