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What do you understand by ownership capital and borrowed capital? Distinguished between them?? |
| Answer» \xa0Ownership Capital : Ownership capital consists of the amounts contributed by the owners as well as their profit re-invested in the business. In a partnership firm, the funds contributed by the partners as capital are called ownership capital. Ownership capital remains permanently invested in the business.Borrowed Capital: Borrowed fund include all funds available in the form of loans or credits. Loans are raised to business firms for specified periods at fixed rates of interest. | |