The profit of a sole trader increases his _____
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Correct Answer: Option D
Explanation:
For a sole trader, the profit made by the business increases the owner's capital. In simple terms, profits represent the business’s earnings that add to the owner’s equity or investment in the business. This increase in capital happens because the sole trader’s personal capital is directly linked to the performance of the business.
For a sole trader, the profit made by the business increases the owner's capital. In simple terms, profits represent the business’s earnings that add to the owner’s equity or investment in the business. This increase in capital happens because the sole trader’s personal capital is directly linked to the performance of the business.