Question

Which of the following equation is related with Dual Aspect Concept?

• A. Total Assets = Total Liabilities
• B. Total Assets = Capital + Outsider's Liabilities
• C. Capital = Total Assets - Outsider's Liabilities
• D. All of the above

Answer 1

Answer: (D)

All of the above

Dual aspect concept defines that every business transaction will have its two effects. One for debit and one for credit. For every debit there will be a credit and vice versa. At the end, the total balance of debit must be equal to the total balance of credit.

All the below mentioned equations are based on dual aspect concept and are true:

Total Assets = Total Liabilities

Total Assets = Capital + Outsider's Liabilities

Capital = Total Assets - Outsider's Liability