What are the advantages of the double accounting system?
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The advantages of Double Account System are:
(1) As Depreciation Fund is compulsorily created and invested in outside securities, it helps to replace an asset without affecting the liquid resources, viz., Cash, of the concern.
(2) Revenue account represents the operating activities which expresses the operating result of the undertaking while extraneous items are recorded on Net Revenue Account which expresses the real operational result.
(3) The capital account helps us to understand the source of capital in various forms and the application of the same in the form of various fixed assets. Thus, it can be easily followed by an ordinary person.
(4) Since these concerns enjoy almost monopoly rights given by the Government, the Government may understand whether the concern supplies the efficient service at reasonable cost or not after analyzing its prescribed format of accounting.
(1) As Depreciation Fund is compulsorily created and invested in outside securities, it helps to replace an asset without affecting the liquid resources, viz., Cash, of the concern.
(2) Revenue account represents the operating activities which expresses the operating result of the undertaking while extraneous items are recorded on Net Revenue Account which expresses the real operational result.
(3) The capital account helps us to understand the source of capital in various forms and the application of the same in the form of various fixed assets. Thus, it can be easily followed by an ordinary person.
(4) Since these concerns enjoy almost monopoly rights given by the Government, the Government may understand whether the concern supplies the efficient service at reasonable cost or not after analyzing its prescribed format of accounting.
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