Question

Why are the total of two sides of the balance sheet equal ?
(a) Cost Concept
(b) Dual aspect concept
(c) Entity concept
(d) All of the above​

Answer 1

Answer:

(c) Entity concept is the Right answer of the question.

Answer 2

The total of two sides of the balance sheet is equal because of the dual aspect concept. (Option b)

• In accounting, the dual aspect concept states that each and every transaction a business enters into has two equal effects.
• During a transaction both the credit and debit sides are involved which ensure the accuracy of activities.
• This concept also forms the ground of the system of double-entry and is used worldwide for recording business transactions.
• This leads to an equal total of the two parts of any balance sheet.