In this clip, you can see the dual aspect concept.
The dual aspect is the basic principle of accounting.
It provides the basis for recording business transactions
in the books of accounts.
This concept assumes that every transaction recorded in the
books of accounts is based on dual concept.
This concept says that every transaction has two effects.
For example, if you buy goods and make cash payment, it has
two effects.
If you buy goods and make loan, it also has two effects.
If you calculate every transaction, it will be based on the
dual aspect concept.
Every transaction has two aspects and two effects.
This implies that the transaction that is recorded affects
two accounts on their respective opposite side.
The dual aspect concept affects two accounts.
For example, if you buy goods and make cash payment, the
purchase account will be debited and the cash account will
be credited.
The purchase will be debited according to the debit word
comes in.
However, the purchase has a debit all expenses rule.
The cash will be credited according to the credit word goes
out rule.
Similarly, if you buy a loan, the purchase account will be
debited and the creditor account will be credited.
According to the credit the giver rule.
So, the effect of any transaction affects two accounts.
For example, goods purchased in exchange for cash have two
aspects such as paying cash and receiving goods.
Therefore, both the aspects should be registered in the
books of accounts.
The duality of the transaction is commonly expressed in the
terms of the following equation.
Asset is equal to liability plus capital.
The dual aspect concept also presents an equation in front
of us.
Assets is equal to liabilities plus capital.
How is this equation sir?
Just prove it.
Friend, where does money come from to the business?
Either take a loan or put the owner.
Liability plus capital creates business assets.
The dual concept implies that every transaction has a
similar effect on asset and liability in such a way that
the value of the total asset is always equal to the value
of the total liability.
The dual aspect concept says that the equation is asset is
equal to liabilities plus capital.
This equation will be satisfied after every transaction.
For example, we purchased goods in exchange for cash.
Asset is equal to liabilities plus capital.
There is no effect on the asset side and no effect on
liabilities plus capital.
For example, we purchased goods in exchange for cash.
Asset is equal to liabilities plus capital.
Next example.
The owner has invested capital in the business.
Therefore, the balance of cash and assets will increase.
On the other hand, capital will increase.
This equation will always be satisfied.
This is the dual aspect concept.
You can see the effect of any transaction.
Thank you.