09/07/2020 by Beki Wallace AATQB MIAB 0 Comments
WHAT DOES CAPITAL REFER TO?
The term ‘capital’ refers to assets or resources owned by the business that will aid in generating income and be used for further development of the business.
Both cash funds, and money in the bank are considered as ‘capital’.
Some other examples include:
Capital is also referred to as assets less liabilities. The amount of resources of value less any debts and money owed.
Lastly the term is also used to identify any owner investments, stock or shares in a company.
With so many ways to interpret the word ‘capital’, things can easily become confusing.
If unsure, bookkeepers and accountants are always on hand to help.
‼️ Monitoring capital is vital to understanding business finances, knowing what funds and resources are available, thus ensuring a business can continue to grow and develop.