capital is balance sheet i think. but if i am wrong what catergorie does it fall in. income statement or statement of changes in owner equity, or balance sheet.
Capital typically falls under the category of the statement of changes in owner's equity. This statement shows the changes in the owner's equity over a specific period, including capital contributions or withdrawals. The balance sheet, on the other hand, provides a snapshot of the company's financial position at a particular point in time, including the total assets, liabilities, and equity. The income statement, also known as the statement of profit and loss, shows the company's revenues, expenses, and net income or loss for a specific period.
Capital is indeed a component of the balance sheet. The balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It consists of three main categories: assets, liabilities, and owner's equity (or capital).
Assets represent what the company owns, such as cash, inventory, and property. Liabilities represent what the company owes, such as loans or accounts payable. Owner's equity, also known as capital, represents the residual interest in the assets of the company after deducting liabilities.
So, to answer your question, capital falls under the category of owner's equity on the balance sheet. It reflects the accumulated value of the owner's investments in the company plus any retained earnings or profits that have been reinvested in the business.
If you ever get confused about categorizing different items in financial statements, it is helpful to refer to the basic structure and purpose of each statement. The income statement focuses on a company's revenues, expenses, and net income over a specific period, while the statement of changes in owner's equity shows the movements in capital due to investments, withdrawals, and profitability. The balance sheet, on the other hand, summarizes the company's financial position at a specific point in time, including assets, liabilities, and owner's equity.