The statement that is not correct is "drawings increase capital". Drawings are the amounts taken out by the owner(s) from the business for personal use, and they reduce the capital of the business. Therefore, the correct statement is "drawings reduce capital".
Profits increase the capital of the business because they increase the amount of money the business has earned, and thus the amount of money that belongs to the business owner(s). Losses reduce the capital of the business because they decrease the amount of money the business has earned, and thus the amount of money that belongs to the business owner(s).