Capital Account Legal Meaning and Definition

Here is a simplified definition of the legal term Capital Account.

Capital Account (noun)

  1. In the context of business finance, a Capital Account refers to a company's financial record that tracks long-term investments and financial activities. These are transactions or assets that are expected to benefit the business beyond the current financial year.

  2. In international economics, a Capital Account is used to record the inflow and outflow of investments between a country and the rest of the world. This account contains transactions involving ownership of assets or liabilities, such as purchasing foreign securities or real estate.