Capital can refer to funds raised to support a particular business or project. Capital can also represent the accumulated wealth of a business, represented by its asset less liabilities. Capital can also mean stock or ownership in a company.
In short, Capital is the residual value of assets minus liabilities.
To simplify, Capital, ito ‘yung puhunan mo sa negosyo.
For example, since summer na naman at mabenta ngayon ang shake, nag decide kang rumaket at mamuhunan para magtinda ng shake. May naipon kang 1,500.00 php sa allowance mo. Para sapat ang puhunan mo, umutang ka ng another 1,500.00 php sa kaibigan mo. To sum it up, may 3,000.00 php ka on hand. Bumili ka ng blender na nagkakahalaga ng 600php. Ang tanong, magkano ang Capital mo?
Ang sagot, P 1,500.00.
Solution:
Ipon mula sa allowance ------ 1,500.00
Hiram sa kaibigan------------- 1,500.00
Total na pera------------------ 3,000.00
Less: Blender----------------- 600.00
Natitirang pera----------- 2,400.00
ACCOUNTING EQUATIONS:
ASSET – LABILITIES = CAPITAL (A-L=C)
ASSET = LIBILITIES + CAPITAL (A=L+C)
LIABILITIES = ASSET – CAPITAL (L=A-C)
***Always take note ang accounting equations na ‘yan dahil magagamit niyo ‘yan throughout the subject. Hanggang sa board exam and up to work. Ganyan lang kadali ang equation ng accounting.
Back to the problem, since Capital is equals to Asset minus Liabilities, Sa given problem, possible ba na ma-identify natin kung magkano ang total assets? The answer is yes. Sa previous chapters, na discuss ko na ang meaning ng asset.
Total Current Asset is 2,400 php. Ito ‘yung amount ng natitirang pera. Laging tatandaan na ang most liquid na Asset is Cash. Ano bang ibig sabihin kung sinabing liquid? In accounting terms, ito ‘yung time na ‘yung asset ay mako-convert into cash. Cash to cash. Since si cash ay cash na, most liquid siya.
Total Noncurrent Asset is 600.00 php. Ito ‘yung amount ng blender. Take note also na ang current and noncurrent ay nagdi-differ depende sa nature of business. Since magtinda ng shake ang negosyo, we can say na noncurrent ang blender.
To sum it up, ang total na Asset natin ay 3,000.00 php.
Total Liabilities is 1,500.00 php. Ito ‘yung hiram sa kaibigan. Pero, can you classify it kung current ba siya or noncurrent? The answer is current liability siya. You may refer to the previous chapter kung bakit nasabi kong current.
May amount na tayo ng total assets which is 3,000.00 and total liabilities na 1,500.00. Kung apply natin ang accounting equation na Asset – Liabilities = Capital, ang total Capital natin ay 1,500.00 php.
As simple as that. Kung marunong na kayo mag identify kung ano ba ang asset, liabilities and capital, 50% na makakagawa na kayo ng Balance Sheet or Statement of Financial Position.
By the way, sa Capital, walang current and noncurrent. Instead, composed ang Capital ng Retained earnings and Net Income.
Beginning Capital
+ Retained Earnings
Ending Capitial
Beginning Retained earnings
+ Net Income .
Ending Retained earnings
Since ang net income ay part ng Income Statement, sa next chapters ko na idi-discuss ang retained earnings and net income.
...END OF THIS CHAPTER...
A/n: Sorry for late update. Busy season ng CPA's ngayon. ITR filing kasi. Anyways, since may nakikita naman akong progress sa iilan kong readers, itutuloy ko ito😊. Madami-dami na rin kasi nag a-add sa kani-kanilang reading lists. Thanks guise. I have now my reason kung bakit ko ito itutuloy.
Happy vacation everyone!
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Introdution to Accounting
RandomCalling the attention of all aspirant soon to be CPA'S and any other related courses to stop by and read this book. This is a taglish book for better understanding of explanations. Read in order to learn. Listen in order to understand. So what ar...
