ATAR Notes: Forum
HSC Stuff => HSC Humanities Stuff => HSC Subjects + Help => HSC Business Studies => Topic started by: ch3ntastic on September 16, 2016, 07:28:30 pm
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Hi, there was a balance sheet question in our Year11 Business yearly exam today, and one of the values was "Capital 200 000" which I put as owner's equity. Afterwards, half of the grade argued that it was owner's equity, whereas the other half argued it was actually non-current assets because it didn't specify that it was "owner's capital".
To clear things up, if the value was just "Capital", is that owner's equity or non-current assets?
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Hi, there was a balance sheet question in our Year11 Business yearly exam today, and one of the values was "Capital 200 000" which I put as owner's equity. Afterwards, half of the grade argued that it was owner's equity, whereas the other half argued it was actually non-current assets because it didn't specify that it was "owner's capital".
To clear things up, if the value was just "Capital", is that owner's equity or non-current assets?
tbh, they might have a point. Capital in business terms can be any type of accumulation of asset. I never studied what you are doing ( didn't even do the HSC )
I reckon I need to know more about the context, if its stated so that its obvious its related to the owner then yeah assume it but like i need to know more about the context.
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Has to be share capital (owner's capital) to be specifically OE. Capital in itself is too arbitrary and sounds like an investment if anything to me.
Use of the term is quite odd though.
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Capital is an asset
Like Rui said, if it is share capital is is OE
Hope this helps
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Hi ch3ntastic!
Definitely see where you're coming from, doing both business and economics this really confuses me whenever it pops up - capital is a really broad term when not specified (could fall under machinery in non-current assets or simply as an asset in the form of capital investment). However in the past papers i've seen, when not specified capital always falls under owner's equity and not assets; as previously stated this could be in the form of share capital or whatnot. It's really disappointing that balance sheet questions haven't yet been reformed to be less confusing in that area, but to be safe when not specified capital should fall under owner's equity.
Hope this helps!
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my teacher said that capital is always owners equity
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For me, the teacher said that capital is owners equity as in what is owned by the business