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.