Question

profit earned by proprietor:- increases the capital/ decrease the capital/ no effect on capital/ none of above ​

Answer 1

Answer:

increase the capital

this will help u

Answer 2

Profit earned by proprietor increases the capital.

• Changes may take place in the capital account of the proprietor due to the following reasons-

1. Any amount of capital introduced
2. Profit earned in the business
3. Losses incurred

• Profit can be defined as the surplus revenue obtained as compared to the total expenditure.
• This amount can be again reinvested in the same business.