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Hello sir john. Could u pls explain the difference between capital and equity?
Is it also true that sole trader cannot raise money from public because they are not listed on stock exchange so any money put into the business by owner is called capital (instead of equity)?
Limited companies can raise the money from public which is called equity because they are listed on stock exchange so they have equity (instead of capital)?
When sole traders put money into their business it is called capital – there are no shares involved.
Limited companies have shares, and whether or not the shares are quoted on the stock exchange, the shares are called both equity and capital (or often equity capital 🙂 )
Hello Sir John! Can You help me with the following question?
A withdraws 220 per month. During the year he withdraws 2500. Further, he pays 500 on behalf of the company from his drawings. What are his total Drawings?
Why are you attempting a question for which you do not have an answer? You should be using a Revision Kit from one of the ACCA Approved Publishers – they have answers and explanations.
The question as you have typed it is not clear. If he withdraws 220 a month then that is a total of 12 x 220 = 2,640. If the 2,500 is supposed to be in addition to his monthly drawings, then the total drawings are 2,640 + 2,500 – 500.
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