Question
Explain the concept of dual aspect with example.
✓
Answer
Duality principle is important and fundamental accounting convention. According to Dual Aspect Concept, every transaction has two-fold effect
$(1)$ from the angle of benefit received &
$(2)$ from the angle of benefit given. "Every receiver is a giver & every giver is a receiver". So for proper recording of a business transaction, dual effects are necessary. For recording this two effects in the books of accounts, accounting terminology of debit & credit are used. The structure of accounting is based on this concept of duality & accounting equation & balance sheet equation based on this principle, which is as under: $A = C + L$ (Assets = Capital + Liabilities)
Examples:
$(1)$ Other assets are decreases. e.g. purchase of furniture in cash. In this transaction increase an assets& other assets i.e. cash will be decreases.
$(2)$ Increase in liability e.g. purchase of furniture from Jaishree Furniture Mart. In this transaction an assets i.e. furniture increases & also increases in liabilities due to credit matter.
$(3)$ Increase in capital e.g. owner of the business brings personal furniture in business then increase in furniture & also increase in capital.
$(1)$ from the angle of benefit received &
$(2)$ from the angle of benefit given. "Every receiver is a giver & every giver is a receiver". So for proper recording of a business transaction, dual effects are necessary. For recording this two effects in the books of accounts, accounting terminology of debit & credit are used. The structure of accounting is based on this concept of duality & accounting equation & balance sheet equation based on this principle, which is as under: $A = C + L$ (Assets = Capital + Liabilities)
Examples:
$(1)$ Other assets are decreases. e.g. purchase of furniture in cash. In this transaction increase an assets& other assets i.e. cash will be decreases.
$(2)$ Increase in liability e.g. purchase of furniture from Jaishree Furniture Mart. In this transaction an assets i.e. furniture increases & also increases in liabilities due to credit matter.
$(3)$ Increase in capital e.g. owner of the business brings personal furniture in business then increase in furniture & also increase in capital.
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→$(1)$ Commenced business with capital of $Rs.80,000.$
$(2)$ $Rs.20,000$ deposited with bank and opened account.
$(3)$ Goods of $Rs.40,000$ purchases from Himani on credit.
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→| Pass necessary rectification entries to rectify the following journal entries written by Ishwarlal: | |||||
| Date | Particulars | L.F. | Debit(Rs.) | Credit (Rs.) | |
| $1$ | Kishan’s A/c. | Dr. | $7,000$ | ||
| To Cash A/c. | $7,000$ | ||||
| (Being the salary of current month $Rs.7,000$ paid to Kishan) | |||||
| $2$ | Purchase A/c. | Dr. | $9,500$ | ||
| To Clinton's A/c. | $9,500$ | ||||
| (Being the goods of $Rs.9,500$ sold to Clinton on credit) | |||||
| $3$ | Purchase A/c. | Dr. | $17,100$ | ||
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| Total | $33,600$ | $33,600$ | |||
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