Additional capital introduced during the year is treated how, when profit is computed from capital balances?

1. Profit is measured as the genuine increase in capital that the business itself generated. 2. Capital introduced from outside also raises the closing capital, but it is not profit. 3. It is therefore subtracted from the closing capital when arriving at the adjusted closing capital. 4. Drawings move the opposite way and are added back, because they had reduced the closing capital. 5. Treating either one in the wrong direction reverses the sign of the answer, which is the most common error in this unit. _Source: TN HSC Class 12 Accountancy (Samacheer Kalvi, Govt of Tamil Nadu), Unit 1 "Accounts from Incomplete Records", §1.7.1_