68 NATURE OF CAPITAL AND INCOME [Cuar. V

also include, if exhaustively considered, the person of the
owner himself.
The owner may be either an individual human being, or
a collection of human beings, such as a family, an association,
 a joint stock company, a corporation, or a government.
 With respect to a debt or liability, the person
who owes it is the debtor and the person owed is the
creditor.
Every item in a capital account is an element of the
owner's total capital, the assets being positive elements
and the liabilities being negative. Consequently, the algebraic
 sum of the elements of capital, or the difference in
value between the total assets and the total liabilities, is the
net capital, or capital-balance indicated in the account.

§ 2

The items in a capital account are constantly changing,
and their value also, so that when, after one statement of
assets and liabilities is drawn up, another is constructed at a
point of time six months later, the balancing item, or net
capital, may have changed considerably. However, bookkeepers
 are accustomed to keep the item “capital” intact
from the beginning of their account, and to denominate any
increase of it as “surplus” or “undivided profits.” There
are several reasons for this. In the first place, the less
often the bookkeeper’s entries are altered, the simpler the
bookkeeping. Again, by stating separately the original
capital and its later increase, the books show at a glance
what the history of the company has been as to the accumulations
 of capital. Finally, in the case of joint stock companies,
 the capital is represented by stock certificates, the
engraved “face value” of which cannot conveniently be
altered to keep pace with changes in real value. Consequently
 it is customary for bookkeepers to maintain the
book value of the “capital” equal to the face value of the
certificates.