WEEK FIVE (5) TO SEVEN (7)
SOURCES OF CAPITAL
Meaning
A. THE ACCOUNTANT POINT OF VIEW
Accountants define capital as the original fund or money with which a person used to start a business. He considers capital as synonymous with money. Capital in this wise is the owner’s equity assets over liabilities.
B. THE ECONOMIST POINT OF VIEW
Economists must define capital as the resources or wealth made by men that are used for producing further wealth.
C. THE LAYMAN’S UNDERSTANDING
To the layman, capital is the total amount of money for running a business.
SOURCES OF CAPITAL
A. SOLE PROPRIETORSHIP
The sole proprietor can obtain his capital from the following sources.
i. Personal savings
ii. Loan from friends
iii. Trade credit
iv. Loan and overdraft from bank
v. Grants/Loans from government.
B. THE PARTNERSHIP
i. Loan and overdraft
ii. Trade credit
iii. Personal contributions from partners.