Question

Name the categories of accounts according to Modern Concept.​

Answer 1

Answer:

Under the Modern Approach, the accounts are not debited and credited. Hence, the Accounting Equation is used to debit or credit an account. Thus, it is also known as the Accounting Equation Approach.

The Basic Accounting Equation is: Assets = Liabilities + Capital (Owner’s Equity)

Furthermore, it can be expanded as Assets = Liabilities + Capital + Revenues – Expenses

Also, Profit = Revenues – Expenses

The Accounting Equation should remain balanced every time. Because we know that each transaction has a Dual aspect. Thus, each transaction will either affect the debit side and credit side. Also, a transaction may affect two accounts on the debit side or two accounts on the credit side.

Also, the profits will increase the Capital and losses will decrease it.

Explanation:

This is the correct answer

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