Question

All transactions of a business are recorded as having a _____________.

• A. Single effect
• B. Dual aspect
• C. Three-dimensional effect
• D. Any of these

Answer 1

Answer: (B)

Dual aspect

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 application of this aspect is the Accounting Equation, i.e., Assets = Liabilities + Capital.