Comment Re:Somewhere... (Score 1) 111
A retail grocer, for example,
must have a stock of groceries and
other merchandise to sell to customers. The grocer must also have wrapping supplies and store equipment to serve
customers properly and efficiently. Besides these, a supply of cash must be on hand for making change
and paying expenses. This property is called the assets of the business.
A business owner often obtains some of these
assets by purchasing them on credit and promising
to pay for them at some future date. The persons to
whom these debts are owed are called the creditors
of the business. They have claims against the assets
until the debts are paid. The creditors’ claims are
called liabilities of the business.
If the assets are owned free of debt, the proprietor may claim their entire value. If there are liabilities, the proprietor can claim only the value that
remains after deducting the liabilities from the as-
sets. This claim against the assets is called a proprietorship or capital.
