Concept:In a sole proprietorship, the owner and the business are treated as the same entity for accounting purposes.
Explanation:The net profit earned by a sole proprietor belongs entirely to the owner.
It increases the owner's equity or capital in the business.
The profit and loss account is used to determine the net profit, not to record the final transfer.
A profit and loss appropriation account is only used for partnerships and companies.
Drawings account records amounts withdrawn by the owner, not profits.
Therefore, the net profit is transferred directly to the capital account.
Answer:C. capital account