Question

On which concept of the accounting the double entry system is based?​

Answer 1

ANSWER :

★ Duel Aspects Concept

• ➻ The accounting the double entry system is based on Duel Aspects Concept.

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EXPLANATION :

❒ Double Entry System :-

• ➮ The Double Entry System was first evolved by Fra Luca Pacioli.

• ➮ Double Entry System recognises the fact that there are two fold aspects in every business transactions.

• ➮ The basic principle followed under Double Entry System is that every debit must have a corresponding credit. The amount of the debit side must be equal to the credit side.

• ➮ Double Entry System recognizes the fact that there are two fold aspects in every business transaction.

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❒ Duel Aspects Concept :-

• ➮ Dual Aspect Concept is the very foundation of present accounting mechanism which is the Double Entry System of book-keeping as Dual Aspect Concept states that there are Dual or two aspects which is effected by each transaction.

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