Explanation of "Capital Account"
Definition: The term "capital account" refers to a financial record that shows the net value of a business or an economic entity at a specific point in time. In economics, it also represents a section of a country’s balance of payments, which tracks the inflow and outflow of financial assets like stocks and bonds.
Usage Instructions:
When to use: You would typically use "capital account" in discussions about finance, economics, or international trade. It is often used by professionals in these fields, such as accountants, economists, and financial analysts.
How to use: You can use "capital account" in a sentence to discuss the financial status of a business or the economic situation of a country.
Example Sentences:
"The company reviewed its capital account to determine its financial position before making new investments."
"The capital account of the country showed a significant inflow of foreign investments last year."
Advanced Usage:
In a more advanced context, you might hear discussions about how changes in the capital account can affect currency exchange rates or how it reflects a country's economic health.
Economists analyze the capital account alongside the current account to gain a full picture of a nation’s economic activities.
Word Variants:
Different Meanings:
In a general context, "capital" can also mean the city where a government is based or wealth in the form of money or property.
"Account" can refer to a report or description of an event, not just financial records.
Synonyms:
Idioms and Phrasal Verbs:
"In the black": This means that a business has more assets than liabilities, indicating a healthy capital account.
"In the red": This means that a business is operating at a loss, which can negatively affect its capital account.
Summary:
The "capital account" is an important term in finance and economics, helping to track the financial health of businesses and countries.