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Capital is treatedas a liability of the business because it has to be returned to the owners of the business,once they decide to shut the business down and stop their business operations. Hope,I made itclear to you. :)
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Capital is treated as liability of business as business do not present the capital. The capital is presented by the owner or investor. Thus business do not own it, this is only a liability of business to be paid to the owners or investors while winding up ( closing ) the business.
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