Which type of account normally records the owner’s capital introduced into a business?
Correct answer: A. Personal account
- A. Personal account
- B. Real account
- C. Nominal account
- D. Valuation account
Explanation
The owner’s capital account is a personal account because it represents the owner’s claim against the business. Capital is credited when the owner introduces resources into the business.
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About Ledger Accounts and the Trial Balance
Ledger accounts collect transactions under individual headings and use debit and credit sides to determine balances. The trial balance lists those balances to check arithmetical agreement before financial statements are prepared, but it does not reveal every error, such as complete omission, compensating errors or entries made in the wrong account.
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