Capital Account

This
is the part of the balance sheet that shows a sole traders or partner’s equity in
the business. Please note that in Limited companies there is no capital account, there is a section for shareholders funds in limited companies.

If
it’s a Partnership your capital account should split down into each partner’s
share of equity.

It
will typically include the following:

Balance
Brought Forward

Net
Profit (Transferred from Profit and Loss Account)

Capital Introduced (during the accounting
period)

Drawings
this is the owner’s or partner’s wages (during the accounting period)

This
part of the balance sheet should then match the net asset or net liabilities of
the accounts

As
shown below

I’ve
shown in red the items that make up our capital account.

I
have identified in yellow the figures that MUST match on our balance sheet.

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