It is the amount of money invested by the businessman into the business. Net profit earned increases the amount of capital whereas net loss and drawing decrease the capital.
Long term liabilities:
Those liabilities which are spend after long period say after 5 or 10 years are called long term liabilities. Examples of such liabilities are:
Long term liabilities:
Those liabilities which are spend after long period say after 5 or 10 years are called long term liabilities. Examples of such liabilities are:
- Bank loan
- Debentures
- Bonds
- Mortgage
Current liabilities:
These liabilities are to be repaid within a short period usually within an accounting year such as;
These liabilities are to be repaid within a short period usually within an accounting year such as;
- Creditors
- Bills payable
- Bank overdraft
- Outstanding expenses
- Provision for dividend and taxation
- Advance income
- Short term loan.
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