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- meenu007
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:34 pm
This is the only format that auditors will accept if they are to issue opinions on financial statements.
- Abhishek
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:34 pm
Income (profit) earned by the business during a period is compared with the expenditure incurred to earn the revenue.
- Abhishek
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:34 pm
10. Realization Concept:
- Abhishek
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:34 pm
According to this concept profit, should be accounted for only when it is actually realized. Revenue is recognized only when sale is affected or the services are rendered. However, in order to recognize revenue,
- Abhishek
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:34 pm
receipt of cash us not essential. Even credit sale results in realization as it creates a definite asset called “Account Receivable”.
- Abhishek
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:35 pm
However there are certain exception to the concept like in case of contract accounts, hire purchase etc. Similarly incomes like commission interest rent etc.
- Abhishek
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:35 pm
are shown in Profit and Loss A/c on accrual basis though they may not be realized in cash on the date of preparing accounts.
- meenu007
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:35 pm
The economic resources of an entity or organisation is known as assets.
- Abhishek
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:35 pm
11. Verifiable Objective Evidence Concept:
- meenu007
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:35 pm
And the claims of various parties against these assets is known as equities. There are two types of equities which are as follows –
- Abhishek
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:35 pm
According to this concept all accounting transactions should be evidenced and supported by objective documents. These documents include invoices, contract, correspondence, vouchers, bills, passbooks, cheque etc.
- meenu007
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:36 pm
Well, in all the assets of the business, there is claim of someone either it is of owner or creditors.
- meenu007
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:36 pm
The important thing to note is that these claims should not exceed the amount of assets to be claimed, it follows that
- meenu007
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:36 pm
This is fundamental accounting equations expressed in its general form
- meenu007
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:36 pm
This is the formal expression of the dual aspect concept.
- meenu007
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:36 pm
Most of the accounting procedures are derived from this equation.
- meenu007
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:37 pm
In order to reflect the two different types of equities, the equation becomes
- meenu007
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:37 pm
Events that affect the accounting records are known as transactions.
- meenu007
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:37 pm
Every transaction has dual impact on the accounting records .....
- meenu007
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:38 pm
Accounting records both the aspects of the transaction. Hence accounting is known as dual- entry system.
- meenu007
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:38 pm
Ram starts a business and his first act is to open a bank account in which he deposits Rs. 1,00,000 of his own money
- meenu007
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:38 pm
The dual aspect of this transaction is that the business now has an asset that is cash of Rs. 1,00,000. The second aspect of the transaction is that Ram has a claim of Rs. 1,00,000 against the assets of the business. In other words,
- meenu007
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:39 pm
Now suppose business borrows 50,000 from bank. The business accounting record will change in two ways –
- meenu007
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:39 pm
A new claim of creditor that is bank will be there.
- meenu007
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Re: Dual aspect term in Accounting ?
Tue Jan 08, 2019 12:39 pm
is the correct answer . Accounting transactions to be capable to measure in the money values See More
Answers (13)
Answers (13)
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