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Capital

The most important terms in time management

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What is capital?

Capital is normally referred to as the assets owned or needed by a company to provide their goods or services. When trying to define capital we refer to money, debts or the financial value of physical assets.

What is capital in accounting?

Your business needs a flow of money to operate but your capital is more durable and generates wealth through appreciation or dividends.

The meaning of capital can also be less tangible and include patents, software and brand names. These all have real value when doing your capital accounting.

What does capital mean in running a business?

For something to qualify for capital accounting it must provide an ongoing service to your business. If you invest in capital rather than taking money out for immediate consumption you help secure the future prosperity of your business.

What is a capital investment?

It might be your factory or office or a building with the potential to generate money to reinvest in production. When considering what is capital in accounting you need to be aware of depreciation on your tangible assets. Normal wear and tear is taken into account in financial statements and is usually offset against tax liabilities.

You can also buy or take over the debts of another business or individual. Repayments on this debt then become part of your capital accounting.

A capital account definition also needs to include equity based on investments with any dividend income being reinvested in your business.

C


Related words

Bookkeeping

What is bookkeeping? Bookkeeping is simply the activity of keeping financial records of money that company owes and amounts owed to a company. Bookkeeping is the way individuals, businesses and non-profit organisations record and keep their financial records in an easily understood way.

B Bookkeeping Double Entry Bookkeeping

Timesheet Calculator

What is a timesheet? A timesheet or time sheet is a record of the amount of time a worker has spent on a particular job, project or working for a specific client.

T

Invoice Software

What is invoicing software? When a client buys goods or services, their detailed list of purchases is called an invoice. Invoice software works by calculating these various bills, sending them to respective customers, and organizing their receipts online for a simpler bookkeeping process.

I

Accounting System

What is an Accounting System? An accounting system is a system that is employed in a company to organize financial information. It can be either manual or computerized. The main reason why you should be using an accounting system is to keep track of expenses, income, and other activities.

A Accounting system Accounting year Balance sheet

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