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    malak25's Avatar
    malak25 Posts: 8, Reputation: 1
    New Member
     
    #1

    Feb 15, 2008, 11:41 PM
    Ending balance of a capital account
    How do you determine the ending balance of a capital account?
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Feb 15, 2008, 11:49 PM
    Four things affect capital: Revenues (+), Expenses (-), Investments (+), and Withdrawals (-). You will need to know those four things.

    Therefore,
    Beginning Balance
    +Investments
    +Revenues
    -Expenses
    -Drawings
    =Ending Balance

    Remember that Revenues less Expenses = Net Income. So you may need to add Net Income (or subtract Net Loss) rather than doing those separately, depending on the information you're given.

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