general ledger account describing OWNERS' EQUITY in a business. CAPITAL is the equity interest, which is the difference between assets and liabilities. In a sole proprietorship, there is only one capital account since there is only one owner. In a partner-ship, a capital account exists for each owner. In a corporation, capital represents the STOCKHOLDERS' EQUITY, which equals the capital stock issued plus paid-in capital in excess of par (or stated) value plus retained earnings. DONATED CAPITAL is added to and TREASURY STOCK is deducted from total stockholders' equity in the balance sheet.