Explain Dual aspect concept.



0
Explain Dual aspect concept in detail.

4 Answer(s)


0

In a single entry system, only one aspect of a transaction is recognized. For instance, if a sale is made to a customer, only sales revenue will be recorded. However, the other side of the transaction relating to the receipt of cash or the grant of credit to the customer is not recognized.

Single entry accounting system has been superseded by double entry accounting. You may still find limited use of single entry accounting system by individuals and small organizations that keep an informal record of receipts and payments.

Double entry accounting system is based on the duality principle and was devised to account for all aspects of a transaction. Under the system, aspects of transactions are classified under two main types:

Debit
Credit

Debit is the portion of transaction that accounts for the increase in assets and expenses, and the decrease in liabilities, equity and income.

Credit is the portion of transaction that accounts for the increase in income, liabilities and equity, and the decrease in assets and expenses.

The classification of debit and credit effects is structured in such a way that for each debit there is a corresponding credit and vice versa. Hence, every transaction will have 'dual' effects (i.e. debit effects and credit effects).

1

Dual aspect is a basic principal of accounting according to which each & every accounting transaction will have two effects one on the debit side and other on the credit side. For example you pay salary in cash to Mr. Ram of Rs. 15,000/-, now the accounting treatment according to the double entry system would be to Debit(Dr.) Salary by Rs. 15,000/- which will appear under the head "Salaries & wages" in the Profit & loss A/c and a corresponding credit(Cr.) the the cash A/c by Rs. 15,000/- which will reduce your cash in hand by Rs. 15,000/- thereby affecting your balance sheet.

0

As per this concept every Transaction of business Consist of Dual Aspect , That is Debit and Credit Aspect,Where the transaction are recorded in both sides of the account.
Eg: Ramesh Purchased the Furniture for Rs. 50000/-
WE have to record the transaction in journal entries as follows:
As Ramesh Receives the Furniture and pays the cash .....
Furniture A/c Dr.... 50000/-
To Cash A/c Cr 50000/-
(Ramesh Purchased Furniture for Rs.50000)

0

dual aspect transaction shows both debit and credit transactions of the company.

Your Answer

Click on this code-snippet-icon icon to add code snippet.

Upload Files (Maximum image file size - 1.5 MB, other file size - 10 MB, total size - not more than 50 MB)

Email
Password