Pharaoh Hardware Store's Ledger Transactions in May
Cash Balance and Owner's Capital
Explanation
The question refers to the ledger entries of Pharaoh Hardware Store at the beginning of May. According to the information provided, Pharaoh Hardware Store showed a cash balance of $4500 and the owner's equity, also known as owner's capital, was $4500. This indicates that at the start of May, the store's ledger balanced, with assets equaling the owner's claim on those assets.In the context of business and accounting, cash is considered an asset, which would be listed on the left side of the balance sheet. Owner's capital is listed on the right side of the balance sheet and represents the owner's investment in the company. When a business starts, the initial amount of money invested is recorded as owner's capital, which in this case is $4500, equal to the cash on hand.
The subject of this question is Business. We are given information about Pharaoh Hardware Store's merchandise transactions in the month of May. At the beginning of May, the store had $4500 in cash and $4500 in owner's capital.