Owner’s Capital

Owner’s capital is the amount of money or assets invested by the owner into a business.

Explanation:
It reflects the owner’s share in the business and is part of the equity section. Capital can increase through investment or profits and decrease through drawings or losses.

Example:
If the owner invests $20,000 to start a business, that becomes owner’s capital.

Importance:
It represents the owner’s financial stake in the business and helps determine overall equity.

Common Confusion:
Owner’s capital is not a liability—it is part of the business’s equity.