UrbanPro
Login Ask & Answer Success Stories Paid Courses Free Classes Tuition & Classes Fees Write a Review All Categories Help Center
Post your Learning Need Signup as a Tutor
✕

Popular Cities

Bangalore

Hyderabad

Delhi

Mumbai

Chennai

Pune

Kolkata

Gurgaon

Ahmedabad

Jaipur

Noida

✕

Take Class 11 Tuition from the Best Tutors

  • Affordable fees
  • 1-1 or Group class
  • Flexible Timings
  • Verified Tutors

Book a Free Demo

Class 11 Tuition > Learn Accountancy > Why are rules of debit and credit same for liability...
✕

Search in

Why are rules of debit and credit same for liability and capital?

Asked by Last Modified  

5 Answers

Learn Accountancy +1 Class XI-XII Tuition (PUC)

Follow 8
Answer

Please enter your answer

Language Trainer and Parenting Coach

According to the accounting entity concept, business is seperated from its owner.So the investment made by the owner (ie capital) is the fund that is to be repaid to the owner itself, at the very last when the company winds up. Liability is the amount the business owe to an outsider.Same way, capital...
read more
According to the accounting entity concept, business is seperated from its owner.So the investment made by the owner (ie capital) is the fund that is to be repaid to the owner itself, at the very last when the company winds up. Liability is the amount the business owe to an outsider.Same way, capital is also the amount the business owe to owner who is treated like an outsider. So liabilty and capital are having the same rule as both of these are the one business owes to others. read less
1 Comments
Dislike Bookmark

Company form of organization by definition, is the organization registered under Companies Act, 2013 or any previous Compnaies Act of India. Companies Act cleatly states that " Company is a distinct legal entity" that is it is sepaprate from its owner. Thus company is treated as an independent entity...
read more
Company form of organization by definition, is the organization registered under Companies Act, 2013 or any previous Compnaies Act of India. Companies Act cleatly states that " Company is a distinct legal entity" that is it is sepaprate from its owner. Thus company is treated as an independent entity and capital is the amount owed by the Company to the owners. read less
Comments
Dislike Bookmark

Every business acquires funds from internal as well as from external sources. According to the business entity concept, the amount borrowed from external sources together with internal sources like, capital invested by proprietor, is termed as liability to the business. Business entity concept treats...
read more
Every business acquires funds from internal as well as from external sources. According to the business entity concept, the amount borrowed from external sources together with internal sources like, capital invested by proprietor, is termed as liability to the business. Business entity concept treats business and business owner separately. Capital of the owner is treated as liability to the business because the business has to repay the amount of capital to owner, in case of closure of business. As liability incurred is credited, in same way, fresh capital introduced and net profit increases the owner’s capital, and thus, capital is credited. On the other hand, if liability is paid, it reduces liability, and so, it is debited. Likewise, drawings from capital and net loss reduce capital, and hence, capital is debited. So, rules of debit and credit are same for both liability and capital. read less
1 Comments
Dislike Bookmark

Capital is known as internal liability which is to be paid only after paying other liabilities. Other than Capital, other liabilities are known as external liabilities. As both are liabilities rules are same
Comments
Dislike Bookmark

Commerce, law, tutor in Kasumpti Shimla

As per company act 2013 A Company is a separate legal entity which can sue and can be sued and the separation of management is a major characteristics that the company being managed by the directors appointed by shareholder of the company. So it is well clear that shareholder are those person's or entities...
read more
As per company act 2013 A Company is a separate legal entity which can sue and can be sued and the separation of management is a major characteristics that the company being managed by the directors appointed by shareholder of the company. So it is well clear that shareholder are those person's or entities who invest a definite amount in a company and a company the receiver of this amount becomes debtor of those shareholder as company have to return back this money in future . Moreover the shareholding is the liability of a company which shall be paid by the company to it's shareholders in future as and when required . Shareholder investment money is called capital and it is hence proved that it shall be in liability side of balance sheet of a company read less
Comments
Dislike Bookmark

View 3 more Answers

Related Questions

What is matching concept in acvount? 
Cost should match with revenue for that period
Harender

How many types of GST in India 
Four types of GST in our India. 1.SGST 2.CGST 3.UGST 4.IGST
Subhash Chandra Thakur
Which statement is prepared to know the profitability of the business?
Profitability of a business entity can be estimated through trading p&l account. Where trading account states the gross profit and p&l account states the net profit earned by the entity.
Sumit
0 0
8

How to become a tutor in urbanpro? 

 
TO BECOME A TUTOR IN URBON PRO YOU HAVE DOWNLOAD THE URBAN PRO TUTOR APP FROM PAY STORE . SIGN IN WITH DETAILS . CREATE A PROFILE WHICH WILL ACT AS . ADD VERFICATION DOCUMENTS AND ALL NECESARY DETAILS . TO CONTINOU TUTOR HAVE TO LOGIN TO THE PORTAL
Kiruthiga
What is meant by Capital?
In simple terms any thing bring by the owner of business to start the business activity or for investing
Arati Chaudhari
0 0
8

Now ask question in any of the 1000+ Categories, and get Answers from Tutors and Trainers on UrbanPro.com

Ask a Question

Related Lessons

Introduction To Accounting: Part 2: Book Keeping, Accounting And Accountancy
Book Keeping: Book Keeping is mainly concerned with record keeping or maintenance of books of accounts. The maintenance of books of accounts includes the following four activities: Identifying the...

Nishant Kumar

0 0
0
Why??????
Many times I have seen that students don't understand the basic accounting knowledge. Here I am not talking about the accounting principles or concepts. I am talking about the FUNDAMENTAL knowledge behind...

Nishant Katoch

0 1
0
Accounting Cycle
Accounting Cycle Transactions ↓ Journal Entries ↓ Ledger ↓ Trial Balance ↓ Final Account

Rishi Parmar

0 0
0
Chapter 1 - Introduction to Accounting
History of Accounting : Before knowing the history of accounting, let us know about the history of money which is the basis of the accounting process. Money : Item or verifiable record accepted for...
D

Dhanalakshmi R.

1 0
0
What is Accountancy?
ॐ श्री सरस्वत्यै नमः We all know this subject very well from our childhood. Remember those days of childhood when we share toffee and chocolates with your brother, sister and friends; we use to either...

Abhishek Pansari

1 0
0

Recommended Articles

How To Choose The Right School For Children?

Quality education does not only help children to get a successful career and life, but it also hugely contributes to society. The formal education of every child starts from school. Although there are numerous schools, parents find it challenging to choose the right one that would fit their child. It is difficult for them...

Read full article >

Science, Arts Or Commerce - Which One To Go For?

Once over with the tenth board exams, a heavy percentage of students remain confused between the three academic streams they have to choose from - science, arts or commerce. Some are confident enough to take a call on this much in advance. But there is no worry if as a student you take time to make choice between - science,...

Read full article >

6 Exam Hall Tips To Follow, For Every Good Student

Appearing for exams could be stressful for students. Even though they might have prepared well, they could suffer from anxiety, tension etc. These are not good for their health and mind. However, following a few exam preparation tips can save them from all these and help them to score good marks. Let’s find out all...

Read full article >

The Trend of E-learning and it’s Benefits

E-learning is not just about delivering lessons online. It has a much broader scope that goes beyond manual paper or PowerPoint Presentations. To understand the reach of E-learning and how the whole process works in developing the Educational system, we will discuss a few points here. Let us find out how this new learning...

Read full article >

Find Grade 11 Tuition near you
Grade 11 Tuition in Delhi
Grade 11 Tuition in Bangalore
Grade 11 Tuition in Hyderabad
Grade 11 Tuition in Kolkata
Grade 11 Tuition in Chennai
Grade 11 Tuition in Mumbai
Grade 11 Tuition in Pune
Grade 11 Tuition in Gurgaon
Grade 11 Tuition in Noida
Grade 11 Tuition in Ghaziabad

Looking for Class 11 Tuition ?

Learn from the Best Tutors on UrbanPro

Are you a Tutor or Training Institute?

Join UrbanPro Today to find students near you
X

Looking for Class 11 Tuition Classes?

The best tutors for Class 11 Tuition Classes are on UrbanPro

  • Select the best Tutor
  • Book & Attend a Free Demo
  • Pay and start Learning

Take Class 11 Tuition with the Best Tutors

The best Tutors for Class 11 Tuition Classes are on UrbanPro

This website uses cookies

We use cookies to improve user experience. Choose what cookies you allow us to use. You can read more about our Cookie Policy in our Privacy Policy

Accept All
Decline All

UrbanPro.com is India's largest network of most trusted tutors and institutes. Over 55 lakh students rely on UrbanPro.com, to fulfill their learning requirements across 1,000+ categories. Using UrbanPro.com, parents, and students can compare multiple Tutors and Institutes and choose the one that best suits their requirements. More than 7.5 lakh verified Tutors and Institutes are helping millions of students every day and growing their tutoring business on UrbanPro.com. Whether you are looking for a tutor to learn mathematics, a German language trainer to brush up your German language skills or an institute to upgrade your IT skills, we have got the best selection of Tutors and Training Institutes for you. Read more

ThinkVidya Learning Pvt Ltd © 2010-2025 All Rights Reserved