Question

explain how the principle of duality is carried out in recording the day-to-day transactions of a business.

Answer 1

Duality Principal in Accounting

Explanation:

• Duality Principle,also known as The Dual Aspect Concept, is one of the fundamental Accounting concepts which allows the recognition of all accounting aspects of day-to-day transactions.

• It is the basis of Double Entry Accounting system.

• If we look at the single entry system of accounting,only one end or part of a transaction is recorded or recognized.For example,If goods are sold to a customer then only the sales revenue part of that transactions will be recorded in the books of the organisation and the 2nd part i.e the customer part will be ignored.

• Single Entry accounting system is still applied but its use has become very limited,only to very small business entities/organizations and individuals,because of the introduction of Double Entry Accounting systems.

• Under the Dual Aspect Concept or Duality Principle,the aspects of a transaction are recognized through-

1. Debit
2. Credit  

• Debit is that portion of a transaction which is recorded on increase/occurrence in/of assets,expenses and decrease is Liabilities and capital/income.
• Credit is that portion of a transaction which is recorded on increase in Liabilities,income,capital and decrease in assets,expenses.

• The above 2 aspects i.e Debit and Credit have been constructed in such a way that for each debit recognition,there is a corresponding credit recognition and vice-versa.

• Therefore,every transaction will have a "dual" effect.