capital account

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capital account (plural capital accounts)

  1. (accounting) An account in the net worth section of the balance sheet of an entity such as sole proprietorships and partnerships. In this context, the "capital account" (or, in cases of more than one owner, the "sum of all individual capital accounts") is the residual difference between total assets minus total liabilities, or the "net worth" of the entity. The term should not be confused with similar terms such as "working capital," "capital asset," "capital expenditure," and "capital lease."
  2. In corporations "capital stock accounts" are roughly equivalent to capital accounts except corporations may include other capital accounts such as "retained earnings" which are not individually owned by the shareholders.
  3. (economics) An account that records all transactions between domestic and foreign residents that involve a change of ownership of an asset. It is the net result of public and private international investment flowing in and out of a country.