Capital and Surplus in the Corporate Balance Sheet.

Abstract In the article, the author discusses on the progress made in the balance sheet practices. There is still a good deal of confusion, however, due largely to the lack of uniformity and definition in balance sheet terminology and to the use of narrow or "specialized" methods of approach in our efforts to solve the problem. This is particularly true for the moment designate as the "net asset" section of the corporate balance sheet. The influence of the double entry method on the reasoning of accountants has long been a suspicious issue. The quality of accountant's logic has on occasion been impaired by their passion for balance. Therefore, the author starts with the corporate balance sheet in statement form, a showing based on the formula of assets minus liabilities as representing net assets. The "three layers" of balance sheet have been characterized as the gross economic capital, itemized and individual liabilities and their total, and the net economic capital of the enterprise. The author submits that the subdivision of net economic capital is to be made on the basis of origins, restrictions on withdrawal, and administrative control.