To reflect an increase in proprietor's equity, which account would you credit?

In accounting, to reflect an increase in proprietor's equity, the appropriate action is to credit the Net Profit account. When a business earns a profit, this amount contributes to the owner's equity in the business. By crediting the Net Profit account, you effectively increase the overall equity held by the proprietor.

This occurs because net profit increases the retained earnings part of equity in the accounting equation (Assets = Liabilities + Owner's Equity). When profits are generated, they signify successful operations, enhancing the financial health of the business and, subsequently, the owner's stake in it.

Other choices do not directly lead to an increase in proprietor's equity in the same way. For instance, sales returns would reduce revenue, thus negatively impacting equity. Debits typically represent a decrease in equity or assets, and liabilities pertain to what the company owes, which does not enhance the equity balance. Therefore, crediting the net profit account aligns directly with increasing proprietor's equity.