A concept on which double entry book keeping system is based is ___________.
A concept on which double entry book keeping system is based is ___________.
The correct option is B Dual aspect concept
Dual aspect is the foundation or
basic principle of accounting. It provides the very basis for recording
business transactions into the book of accounts. This concept states that every
transaction has a dual or two-fold effect and should therefore be recorded at
two places. In other words, at least two accounts will be involved in recording
a transaction.
The double-entry system also
requires that for all transactions, the amounts entered as debits must be equal
to the amounts entered as credits.
The best example to describe the concept is Accounting Equation.
Assets = Liabilities + Capital.
In other words, the equation states that the assets of a business are always
equal to the claims of owners and the outsiders.
Dual aspect is the foundation or basic principle of accounting. It provides the very basis for recording business transactions into the book of accounts. This concept states that every transaction has a dual or two-fold effect and should therefore be recorded at two places. In other words, at least two accounts will be involved in recording a transaction.
The double-entry system also requires that for all transactions, the amounts entered as debits must be equal to the amounts entered as credits.
The best example to describe the concept is Accounting Equation.
Assets = Liabilities + Capital.
In other words, the equation states that the assets of a business are always
equal to the claims of owners and the outsiders.
