Skip to main content

What is Dual Aspect Concept in accounting ?

The Dual Aspect Concept : Dual Aspect Concept, also known as Duality Principle, is a fundamental convention of accounting that necessitates the recognition of all aspects of an accounting transaction. Dual aspect concept is the underlying basis for double entry accounting system. Explanation 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 Single entry accounting system has been superseded by double entry accounting.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 tran...
Post a Comment

Difference between Book Keeping and Accounting

                                          Book Keeping

1. Book Keeping is concerned with identifying financial transactions; measuring them in money items; recording and classifying them.

2. Its primary stage.

3. Junior staff performs this function.

4. This job is clerical and routine in nature.

5. The objective of book keeping is to maintain systematic records of financial transactions.

6. Book Keeping is the basis of accounting.

7. Book Keeping is mechanical in nature and thus, does not require special skills.



                                         Accounting 

1. Accounting is concerned with summarizing the recorded transactions, interpreting them and communicating the results.

2. It is a secondary stage . It begins where book keeping ends.

3. Senior staff performs this function.

4. This job is analytical and dynamic in nature.

5. The objective of accounting is to ascertain net results of operations and financial position and to communicate information to the interested parties.

6. Accounting begins where book keeping ends.

7. Accounting requires special skills and ability to analyse and interpret.
 

 












Labels:

Comments

Post a Comment

Popular posts from this blog

System of Accounting

                        Systems of accounting The system of recording transactions in the books of accounts are classified into two types : 1. Double Entry System  The Double Entry System of accounting was developed in the 15th century in Italy by Lucas Pacioli. Under the system, every transaction has two aspects--Debit and Credit and at the time f recording a transactions, It is recorded once on the debit side and again on the credit side.  2. Single Entry System  Single Entry System of recording transactions in the books of accounts, may be defined as a system, which is an incomplete double entry system. In this system , all transactions are not recorded on the double entry basis. As regards some transactions,both aspect of the transactions are recorded, as regards others, either one aspect is recorded or not recorded at all. Instead of maintaining all the accounts, only personal accounts ...
Post a Comment
Read more

What is Dual Aspect Concept in accounting ?

The Dual Aspect Concept : Dual Aspect Concept, also known as Duality Principle, is a fundamental convention of accounting that necessitates the recognition of all aspects of an accounting transaction. Dual aspect concept is the underlying basis for double entry accounting system. Explanation 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 tran...
Post a Comment
Read more

Basic Accounting Terms

                                Basic Accounting Terms Transaction :  An economic activity that affects financial position of the business and can be measured in terms of money e.g. sale of goods, paying for expenses etc Voucher :  The documentary evidence in support of a transaction is known as voucher. For example, if we buy goods for cash we get cash memo, if we buy on credit we get an invoice, when we make a payment we get a receipt and so on. Capital :  Amount invested by the owner in the firm is known as capital. It may be brought in the form of cash or assets by the owner. Assets :  Assets are economic resources of an enterprise useful in its operations. Assets can be broadly classified into two types :                1. Fixed Assets  are assets used for normal operations and held on a long-          ...
Post a Comment
Read more