Capital transactions are essentially transaction between owners and as a result, must never appear on the income statement.

Question

Quizplus · Accepted Answer

Capital transactions are not related to the operations of the business and therefore should not be included in the income statement. They are usually recorded in the owner's equity section of the balance sheet. Examples of capital transactions include issuing or repurchasing shares of stock, paying dividends to shareholders, and acquiring or disposing of long-term assets.

Capital Transactions Are Essentially Transaction Between Owners and as a Result