Question

Accounting equation satisfies the---------------------concept of accounting​

Answer 1

ANSWER :

• Accounting equation satisfies the Dual Aspect Concept of accounting.

➬ Duel Aspect Concept is the basis for Double Entry System of book-keeping. It states that there are Dual or two aspects which is effected by each transaction.

➬ The equation for the relationship between Assets, Liabilities and Capital is known as Accounting Equation. The accounting equation is : Asset = Liability + Capital.

• ❍ According to Dual Aspect Concept, every business transaction has a double effect, i.e., two sides. Dual Aspect Concept expresses the relationship between Assets, Liabilities and Capital that is expressed in the form of equation.

• ❍ Dual Aspect Concept is the very foundation of present accounting mechanism which is the Double Entry System of book-keeping.

• ❍ Double Entry System was first evolved by Fra Luca Pacioli. Double Entry System recognizes the fact that there are two fold aspects in every business transaction.