Captial Question

[punkech]

Hello, I'm reading a book called introduction to accounting by Peter Atrill, I'm confuced about something ..

If I had 20,000 cash or assets and I purchased some stock for a business, I would have no cash left but have 20,000. assets. The capital I put into the business would be... ( the answer is 20,000).

I can't understand why the capital is the same ? can someone explain thoughtfully this to me. thank-you.

 

[Triest123]

Hello, I'm reading a book called introduction to accounting by Peter Atrill, I'm confuced about something ..

If I had 20,000 cash or assets and I purchased some stock for a business, I would have no cash left but have 20,000. assets. The capital I put into the business would be... ( the answer is 20,000).

I can't understand why the capital is the same ? can someone explain thoughtfully this to me. thank-you.

=> If you invest $20,000 cash into a business
The capital is the "cash"

Dr Cash $20,000
Cr Capital $20,000

You purchase $20,000 stock for the business, and there is no cash left for the business
The capital is the "stock"

Dr Stock $20,000
Cr Capital $20,000