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Answer Posted / v.l.kundana
We shoud add net profit to capital because according to bussiness entity concept entetprise is a seperate entity apart from its owner . So when the owner starts the bussiness by investing capital say 6,00,000 then the bussiness owes to pay the invested capital to the owner in other words the enterprise is liable to to the ownerfor the capital invested. So when the firms earns profit it is a liability because it the ousider's money(owner) frm which the enterprise earned. So when anything which does not belong to the enterprise it is a liability. So we should add net profit to capital
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