Startup Terms Glossary
What is a Capital Account?
Capital accounts are those containing a startup’s cash and assets. Owners can use a capital account to fund operating expenses and earning revenue. The amounts reported don’t always reflect a startup’s market value due to several accounting principles.
Still, they will tell investors about how much the owners have invested.
Different types of businesses that use capital accounts include:
- Type 1. Sole proprietorships and freelancers
- Type 2. General, limited, and professional partnerships
- Type 3. Limited liability companies (LLCs)
- Type 4. S-corporations
- Type 5. Family and business trusts
Capital Account Examples
Examples of capital accounts include:
- Example 1. The bank account that contains Uber's operating cash.
- Example 2. The bank account that contains DocuSign's operating cash.
This article also talks about capital accounts.
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