The amount invested by the proprietor to start the business is called:
Correct answer: C. Capital
- A. Drawings
- B. Business
- C. Capital
- D. All of themSearch Public Records
Explanation
The proprietor’s initial investment creates the owner’s capital, which represents the owner’s claim on the business. Drawings are withdrawals by the proprietor, not the amount invested.
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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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