Question

According to the dual aspect concept of the Double Entry System, every transaction has:

• A. One aspect
• B. Neither debit nor credit
• C. Two aspects – a debit and a corresponding credit
• D. Multiple debit entries only

Answer 1

Answer:

C. Two aspects – a debit and a corresponding credit

DOUBLE ENTRY SYSTEM:

• First Book on Double Entry System of Accounting Published by Luca Pacioli.

• According to dual aspects concept, every transactions will have two aspects.

• Double Entry system means for every debit there is a corresponding credit.

• The fundamental equation ASSETS = LIABILITIES

• It is also called Balance sheet equations.

• Owners Equity is called Capital

• Outsiders Equity is Called Liabilities.

• Claim of proprietor = capital

• Claim of outsiders is called = Liabilities

• ASSETS = CAPITAL + LIABILITIES

• CAPITAL= ASSETS – LIABILITIES

• LIABILITIES = ASSET – CAPITAL

• ASSETS - CAPITAL - LIABILITIES = ZERO

• ASSETS = CAPITAL + LIABILITIES

• CAPITAL= ASSETS – LIABILITIES

• LIABILITIES = ASSET – CAPITAL

• ASSETS - CAPITAL - LIABILITIES = ZERO

• Also Known as Accounting equivalence concept.

• The concept is every change in resources brings equal changes in equities.

• Edwin T. freedly -The system of book keeping by double entry is perhaps the most beautiful on in the wide domain of literature or science