ocr: Accounting. Equation Summary_ Initially: ASSETS: == LIABILITIES + PROPRIEIORSFUNDS (the application (the source of funds) off funds) or after trading, PROPRIEIORS FUNDS = CAPTIAL + PROFITS-LOSSES- DRAWINGS Where, CAPITAL - the amount which the proprietor has chosen to invest in the business. PROFITS - the funds generated and subsequently reinvested in a business. LOSSES - funds lost by the business. DRAWINGS - funds taken out of the business by the proprietor for his own personal use. Itis worth noting that drawings is a term only applicable to sole trader companies. As a protection to the cre ...
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