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Question
Which of the following items would fall under the category of a liability?
Which of the following items would fall under the category of a liability?
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Solution
The correct option is D Capital
According to the principle of separate entity, capital is considered as liability for the business and the owner is to paid a certain amount of interest on the capital employed. Cash, Debtors and land are assets.
According to the principle of separate entity, capital is considered as liability for the business and the owner is to paid a certain amount of interest on the capital employed. Cash, Debtors and land are assets.
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