If the owner put all their money earned through profit back in the business, then these net profits are added to

drawings

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interest

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profit

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capital

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Solution

The correct option is D capital
The income earned by the business from its operating activities, it is referred to as profit. If this profit is retained in the business then it will be added back to capital and it increases the capital.

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Similar questions

What kind of business is best described by the following lines :

I am the owner of the business. I take all the risk of the business. I put all the money and I take all the profits.

Which of the following statements does not clearly distinguish between entrepreneurship and management?

(a) Entrepreneurs found the business; managers operate it

(b) Entrepreneurs are the owners of their business; managers are employees

(d) Entrepreneurship is once for all activity; management is a continuous activity

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