Capital in accounting

ommy clear

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Habari waungwana, hivi ni kwanini capital na revenue zina nature ya credit? Kwa mwenye kujua please.
 
Kwa sababu business or organisation and it's owner are two separate parties. Therefore capital inahesabika kama deni (credit) kwa sababu inatolewa na owner
 
Kwa sababu business or organisation and it's owner are two separate parties. Therefore capital inahesabika kama deni (credit) kwa sababu inatolewa na owner
Kwa maoni ya mchangiaji wa kwanza nikiunganisha na yako, "revenue" nayo ni deni!!
 
Asset(A) = Equity(E) + Liability (L)
A= E + L ... At year zero

After end of year one, let say you get profit and all profit retained in a business, automatically increases equity

A= E + L + Profit(P)

But Profit (P) = Income(I) - Expenses(Ex)

Therefore
A= E + L + I - Ex
A + Ex = E + L + I

Therefore Asset and expenses are debit in nature and Equity,liabilities and Income are credit in nature
 
Daah mzee umedadavua vizuri sana , hongera
 
Daaah ebwanaee ulivodadavua mpaka natamani kukuuliza swali lingine , thanks sana Mr IFRS
 

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