Concept:Capital of a sole trader changes only when the owner introduces new capital, withdraws money or goods, or when the business earns a profit or suffers a loss.
Explanation:Paying wages by cash is a business expense. It reduces profit, but it does not directly change the owner's capital.
Equipment purchased by cheque is simply an exchange of one asset (cash) for another asset (equipment). Hence, capital remains unchanged.
A drawing by cheque means the owner takes cash out of the business for personal use. This directly reduces the owner's capital.
A purchase on credit increases both assets and liabilities equally. Therefore, it does not affect capital.
Answer:C. drawing by cheque