Question

What does capital formation occur by? (Select all that apply) saving, producing, investing, selling

Answer 1

Basically, the amount of capital that an entity have could be calculated with : Assets + Total Liability. So the answers would be:

Saving --> will increase assets from the interest
Producing--> your inventory is considered as an assets
Investing--> Directly increase your capital
Selling--> Bringing cash into company, which also considered as assets