Assets, Liabilities and Capital

Assets, Liabilities and Capital

Assets are the things owned by the business

Liabilities are things owed by the business

Capital is the money provided by the owner to the business

Many people think that the money provided by the owner is not capital, but it is wrong. Money provided by the owner id considered as capital and the business is supposed to pay interest on that capital regardless of the fact that the money is provided by the owner