Ram starts a business and his first act is to bring in a cash of Rs 1,00,000 of his own money. The dual aspect of this transaction is that:

Assets (Cash = 1,00,000) = Equities (Owner’s = 1,00,000)

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Assets (Cash = 50,000) = Liabilities (50,000)

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Assets (Cash = 50,000) = Equities (Owner’s = 50,000)

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None of the above

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Solution

The correct option is A
Assets (Cash = 1,00,000) = Equities (Owner’s = 1,00,000)

The dual aspect concept states that every business transaction requires recording in two different accounts. The dual aspect of this transaction is that the business now has an asset that is cash of Rs. 1,00,000. The second aspect of the transaction is that Ram has a claim of Rs. 1,00,000 against the assets of the business.

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