Accounting for IGCSE & O level - Final Statements (Section 11 - No. 24)
What does the term 'capital' represent in a statement of financial position?
The total amount of cash in the business.
The total value of assets owned by the business.
The owner's investment in the business.
The total amount of debts owed by the business.
Explication
Capital represents the owner's contribution to the business, which constitutes their ownership.