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LSDefine

Simple English definitions for legal terms

capital account

Read a random definition: ethical absolutism

A quick definition of capital account:

A capital account is a record of how much money the owners of a company have put in and taken out. It is shown on the balance sheet and includes the money the owners put in when they started the company, any profits they made, and any money they took out. For example, if three people started a company and each put in $20,000, their capital accounts would start at $20,000 each. If the company made a profit of $30,000, each owner's account would go up by $10,000. But if one owner took out $5,000, their account would only be worth $35,000 while the other owners' accounts would still be worth $40,000 each.

A more thorough explanation:

A capital account is a record of the ownership rights of the owners of a company. It is used in accounting and is shown on the balance sheet. The capital account is made up of three things:

  • Capital contributions made by the owners when the company was created or afterwards as required by the business. These contributions add to the capital account.
  • Net income or net losses proportional to the owner's ownership rights at the end of each fiscal year. These are added or subtracted from the capital account.
  • Any distributions of profit made in favor of, or authorized personal withdrawals made by, the owners. These are subtracted from the capital account.

For example, if three people create an LLC and each contributes $20,000, the capital account of each owner starts with a record of $20,000. If the business reports a net income of $30,000 at the end of the fiscal year, each owner's account would increase by $10,000 (assuming equal ownership shares), for a total of $40,000 each. However, if partner A withdrew $5,000, his capital account would be reduced to $35,000, while partners B and C would still have $40,000 each.

The example shows how the capital account works in practice. It demonstrates how the account is affected by capital contributions, net income or losses, and distributions of profit or personal withdrawals. By keeping track of these items, the capital account provides a clear picture of the ownership rights of the owners of a company.

capital | capital asset

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18:41
I think I just wouldn’t reach out and if they ask for them then say that
Dkk
18:41
@tgm Yeah sounds good, say that if they ask
18:47
hey yall
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im premed idk why im here
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we’re like cool and sexy and fun I get it
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true i love ur user
18:49
thank you my little crow friend
Dkk
18:50
Med law easy done
medicine is a scam
join the ethically ambiguous legal field instead
Dkk
18:57
I want to meet an attorney that defends clients who run into flat earth problems. I want an attorney that knows and believes in flat earth theory.
19:05
i want a flat earther for president. i want a guy who posts on 4chan for president. i want someone who mogs for president.
Dkk
19:18
Exactly. My version of that awful poem.
Dkk
19:19
I can accept a president with maybe one or two of the poems traits hut good God, all of them??? No ty.
windyMagician
19:20
president who respects sex is crazy
windyMagician
19:20
we had bill clinton already
Dkk
19:21
Bill Clinton, first and last black president
windyMagician
19:23
I want to go running but my leg feels weird
windyMagician
19:23
it doesn't hurt its just tingly
Dkk
19:26
It needs more alcohol. You tingle when your nerves need watering.
19:27
try stretching it maybe to see what's up
windyMagician
19:27
stretches make me think it's just soreness
windyMagician
19:27
I'm sober lol
Dkk
19:38
Anyone else get the google notification that your LSD password has been compromised lol. LSD got hacked.
20:48
what.jpg @Dkk
CynicalOops
21:03
You think you just fell out of a coconut tree?
jackfrost11770
21:10
nope dk
CynicalOops
22:37
Calvinamala Harris
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