Question

Which of the following are accounting conventions?

• A. Double entry
• B. Accounting equation
• C. Both A & B
• D. None of the above

Answer 1

The correct option is C Both A & B

There are certain principles on which the whole accounting system is based. These principles are commonly known as generally accepted accounting principles. There are various concepts which includes:

Double Entry: This is based on the dual aspect of accounting. It defines that every business transaction will give affects two account i.e. debit and credit. For every debit there will be a credit and vice a versa.

Accounting Equation may be defined as:

Owner Equity+Liabilities=Fixed Assets+Current Assets.