Cash brought by the owner to start business is called__________?
Correct answer: A. Capital
- A. Capital
- B. Loan
- C. Drawing
- D. None of these
Explanation
Cash introduced by the owner increases the owner's capital, which represents the owner's claim on the business. It is not a loan because the business does not owe the amount to an outside lender.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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