Share capital
In one sentenceThe amount the owners or partners contributed to the business at its formation or when it was later increased; it is the first item in equity.
Simply put
Capital is the “owners' money” the business started with, in cash or in kind, such as a car or equipment contributed by a partner.
It does not change with profits and losses, only by a decision to increase or reduce it. Profits accumulate in retained earnings, and capital is not revenue.
Worked example
Three partners founded a store, and each deposited 100,000 SAR into the store's account.
Dr: Bank (debit)300,000
Cr: Share capital (credit)300,000
Share capital (100,000 × 3)300,000 SAR
Don't confuse it with
Working capitalThe difference between current assets and current liabilities; it has nothing to do with what the owners paid in.