What Is The Nature Of Capital Account?


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amber Jhon answered
A capital account comes under the shareholders' equity. In the case of a sole proprietorship, capital account comes under own total owner's equity. However, in the case of the partnerships the nature of the capital account is different because every partner must have a different capital account. In economics, there are two components of a capital account including balance of payments and current account. Moreover, a capital account is of financial nature and it can be calculated as follows:

Capital account = change in foreign ownership of domestic assets - change in domestic ownership of foreign assets = Foreign direct investment + portfolio investment + other investment

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