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THE ACCOUNTANCY OF INVESTMENT Part
IThe Mathematics of Investment CHAPTER I
CAPITAL AND REVENUE i. Definition of Capital
That portion of wealth which is set aside for the
production of additional wealth is capital. The
capital of a business, therefore, is the whole or a
part of the assets of the business, and of course
appears on the active or debit side of its balance
sheet. This is the sense in which the word "capital"
is used in economics; but in bookkeeping; the term
"Capital account" is often used in quite another
sense to mean accounts on the credit or passive
side, which denote proprietorship. To prevent
confusion, the use of the expression "Capital
account" will be avoided. 2. The Use of Capital In
active business, capital must be employed, and, in
order to produce more wealth, it must be combined
with skill and industry. Businesses, and
consequently their accounting methods, vary as to
the manner in which capital is used. Cash is
convertible into potential...

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Description: THE ACCOUNTANCY OF INVESTMENT Part IThe Mathematics of Investment CHAPTER I CAPITAL AND REVENUE i. Definition of Capital That portion of wealth which is set aside for the production of additional wealth is capital. The capital of a business, therefore, is the whole or a part of the assets of the business, and of course appears on the active or debit side of its balance sheet. This is the sense in which the word "capital" is used in economics; but in bookkeeping; the term "Capital account" is often used in quite another sense to mean accounts on the credit or passive side, which denote proprietorship. To prevent confusion, the use of the expression "Capital account" will be avoided. 2. The Use of Capital In active business, capital must be employed, and, in order to produce more wealth, it must be combined with skill and industry. Businesses, and consequently their accounting methods, vary as to the manner in which capital is used. Cash is convertible into potential...