Briefly explain Duality Concept with reference to the Accounting Equation.

Describe Dual Aspect Concept with examples.

3 Answer(s)


According to the dual concept of accounts, every transaction has a two fold effect and this is called dual or double aspect of a transaction.

Eg: When an asset is purchased,another asset(cash or bank) is simultaneously decreased.


yes aachit anu has explained it in a very precise and good manner. I will just add a little bit more to this. every transaction has two aspects to it. for example take a look at the simple accouting equation :

Assets = Liabilities + Capital

Why is this equation true?? It holds true because we are looking at the same thing from two different points of view.

Lets take a very simplified example of a company, Anu Consultants (Pvt) Ltd that has two assets, say Building and Furniture & Fixtures, OK. suppose the Building belongs to the owner of the company and its worth is Rs.1,000,000 and Furniture & Fixture was brought on credit from Aachit Garg & Company for 200,000. OK. Now put these transaction in the accounting equation, OK.

Assets = 1,000,000 + 200,000
Liabilities = 200,000
Capital = 1,000,000

Can you see now WHY the Dual Aspect Concept holds true. You are seeing the resources from two points of view which is

Assets (What they are) = Liabilities + Capital (WHO Supplied them)

Correct?? Have you understood what I mean. hope you find this example interesting. in case any confusion let me know.



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