Why net profit/net loss is added/subtracted to the capital respectively , as capital is a liability that the b/s needs - Economics - Unit I- Indian Economy on the Eve of Independence

Question

Why net profit/net loss is added/subtracted to the capital
respectively , as capital is a liability that the b/s needs to
repay to its owners and this can be done if b/s had profit only
even then we add the profit to the capital and increase the
liability more Why?

Neha Chopra · Accepted Answer

Dear Student,

We add profit or deduct loss from the Capital because ultimately if
there is a profit we are required to pay it to the owners and if it
is a loss we need to reduce our liability;

Do get back to us in case of any further query!!!

Regards,

Why net profit/net loss is added/subtracted to the capital respectively , as capital is a liability that the b/s needs to repay to its owners and this can be done if b/s had profit only even then we add the profit to the capital and increase the liability more.Why?