When fresh capital is introduced , cash / bank A/c increases on asset side of Accounting equation and capital A/c is increased on the other side of Accounting equation. Therefore , introducing fresh capital will increase assets & capital.

Introducing fresh capital will increase both assets and capital. Let's delve into the details of how this occurs.

Assets:
When fresh capital is introduced into a company, it leads to an increase in its assets. Assets are the economic resources owned by a business that have value and can be used to generate future economic benefits. The infusion of fresh capital can take various forms, such as cash, inventory, equipment, or investments. These new resources contribute to the overall value of the company's assets.

- Cash: If the fresh capital is in the form of cash, it directly increases the company's cash balance, which is considered a current asset.
- Inventory: If the fresh capital is used to purchase additional inventory, it increases the company's inventory asset.
- Equipment: If the fresh capital is utilized to acquire new equipment or machinery, it enhances the value of the company's fixed assets.
- Investments: If the fresh capital is invested in securities or other financial instruments, it adds to the company's investment portfolio, which is recorded as an asset.

Capital:
Introducing fresh capital also increases the capital of a company. Capital refers to the total amount of funds contributed by the owners or shareholders to finance the operations and growth of the business. It represents the ownership interest in the company and is recorded in the equity section of the balance sheet.

- Share Capital: If the fresh capital is obtained through the issuance of new shares, it increases the share capital of the company.
- Retained Earnings: If the fresh capital is retained within the company instead of being distributed to shareholders as dividends, it contributes to retained earnings, which is part of the company's capital.

Relationship between Assets and Capital:
Assets and capital are closely linked in the accounting equation. The accounting equation states that assets equal liabilities plus capital (A = L + C). Therefore, any increase in assets must be balanced by either an increase in liabilities or an increase in capital.

The introduction of fresh capital does not impact liabilities directly. However, it can indirectly affect liabilities if the company decides to utilize the fresh capital to pay off its debts or obligations. In such cases, liabilities decrease, and capital increases correspondingly.

In conclusion, introducing fresh capital increases both assets and capital. The infusion of new resources enhances the value of the company's assets, while the fresh capital contributes to the overall capital of the business. This increase in assets and capital strengthens the financial position of the company and provides opportunities for growth and investment.