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JAMB Commerce 2006 Question 25

Question 25

Business Finance

Capital to a business is technically

  1. A.an expense
  2. B.a liability
  3. C.an asset
  4. D.a profit.
Show the answer and explanation

Answer: B (a liability)

Explanation

The business is separate from its owner, so the capital the owner puts in is a debt the business owes him: a liability.