Concept:Net profit is the final profit after all expenses are paid, and it increases the owner's equity in the business.
Explanation:Gross profit is the profit from trading before operating expenses are subtracted.
Net profit is calculated by deducting all operating expenses from gross profit.
Thus, net profit represents the actual financial gain of the business for the period.
When this profit is not withdrawn by the proprietor, it remains in the business as retained earnings.
This retained amount is added to the proprietor's capital and is often called plough-back profit.
Gross profit cannot be added directly because expenses have not been deducted from it.
Net sales and gross sales are revenue amounts, not profit, so they are not added to capital.
Therefore, the item that is added to the proprietor's capital is net profit.
Answer:A. Net profit