Why are the rules of debit and credit same for both liability and capital? - Accountancy

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Why are the rules of debit and credit same for both liability and capital?









Each business gets assets from interior just as from outer sources. As indicated by the business element idea, the sum acquired from the outer sources along with the inner sources like, capital contributed by the owner, is named as obligation to the business. Business element idea treats business and entrepreneur independently. Capital of the proprietor is offered as risk the business on the grounds that the business needs to reimburse how much funding to the proprietor, in the event of conclusion of the business. As risk brought about is credited, in the equivalent way, new capital presented and net benefit expands the proprietor's capital, thus, capital is credited. Then again, assuming obligation is paid, it lessens responsibility, thus, it is charged. Likewise, drawings from capital and overal deficit diminish the capital, thus, capital is charged. In this manner the guidelines of charge and credit are same for both obligation and capital.



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