WAEC Commerce 1995 Theory question 103

(a) Capital is the money and other assets (wealth) that the owner(s) put into a business to start and run it; in accounts, capital = assets − liabilities.
(b) Any five, explained: authorised (nominal/registered) capital – the maximum share capital a company may issue, stated in its Memorandum; issued capital – the part of authorised capital actually offered to and taken up by shareholders; called-up capital – the part of issued capital the company has asked shareholders to pay; paid-up capital – the part of called-up capital actually paid; capital owned – assets less liabilities, the owner's net worth; capital employed – capital owned plus long-term liabilities, or fixed assets plus working capital; working capital – current assets less current liabilities, used for day-to-day running; liquid capital – cash and assets quickly turned into cash; fixed capital – money tied up in fixed assets such as buildings and machinery; borrowed capital – loans, debentures and overdrafts.

Define each type briefly; formulas earn credit for capital employed and working capital.