Question

According to accounting equation concept, every business transaction recorded in accounts has two aspects. Which are these two aspects?

• A. Capital and liabilities
• B. Giving of benefit and receiving of benefit
• C. Liabilities and assets
• D. Giving of profit and receiving of profit

Answer 1

Answer: (B)

Giving of benefit and receiving of benefit

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.

Hence, the two aspects are giving and receiving of benefits.