Question

Dual Aspect concept results in an accounting equation which is __________.

• A. Revenue = Expenses
• B. Capital + Profits = Assets + Expenses
• C. Capital + Liabilities = Assets
• D. Capital + Drawings = Owner's Equity

Answer 1

The correct option is C Capital + Liabilities = Assets

As per dual concept, every transaction has two effects. One effect must be debit and the other must be credit. Dual aspect concept is the basis of an accounting equation. In an accounting equation, there are two sides. One side is total assets and other side is total liabilities. Liabilities include capital and other external liabilities. Assets are always equal to liabilities.

The accounting equation is as follows:

Capital + Liabilities = Assets.