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Is contributed capital a noncurrent asset or a current asset, and is it a debit or credit?

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Question added by Rana Alnajjar , Web developer , Lebcards
Date Posted: 2016/12/15
Frank Mwansa
by Frank Mwansa , ACCOUNTING LECTURER , FREELANCER

The amount invested in a business by the owner are amounts that the business owes to the owner. This is a special kind of liability called capital. In a limited liability company, capital usually takes form of shares. Share capital is also known as equity. As such contributed capital from a company point of view is a liability and is a credit entry.

manseer muhammed ali
by manseer muhammed ali , Accountant General , Royal Lighting L.L.C & Royal Furnishing LLC

The account Contributed Capital is part of stockholders' equity and it will have a credit balance. Contributed capital is also referred to as paid-in capital.

When a corporation issues shares of its stock for cash, the corporation's current asset Cash will increase with the debit part of the entry, and the account Contributed Capital will increase with the credit part of the entry. If the corporation then uses some of its cash to purchase equipment, its current asset Cash will decrease and its noncurrent asset Equipment will increase.

Abdullah Aziz Eldain Morsi  Elgendy -        CMA  Candidate
by Abdullah Aziz Eldain Morsi Elgendy - CMA Candidate , Regional Receivable Accountant , Amiantit Group of Companies

the contributed capital.is part of the stock holder equities ,the nature is credit  

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