Dual aspect term in Accounting ?

This concept does not recognize the realizable value, the replacement value or the real worth of an asset. Thus, as per the cost concept

a) as asset is ordinarily recorded at the price paid to acquire it i.e. at its cost, and

b) this cost is the basis for all subsequent accounting for the asset.

Receive an invoice from a supplier.

For example, if a machine is purchased for Rs. 10,000/- it is recorded in the books at Rs. 10,000/- and even if its market value at the time of the preparation of the final account is Rs. 20,000/- or Rs. 60,000/- the same will not considered.

6. Cost-Attach Concept:

One part of the entry increases an expense or an asset account, which can appear in either the income statement (for an expense) or in the balance sheet (for an asset).

6. Cost-Attach Concept:

power and other overhead expenses. These costs have a capacity to “merge” or “attach”

when they are broughtr together.

The offset to the entry increases the accounts payable liability in the balance sheet. In addition, the change in income triggered by the recordation of an expense appears in retained earnings, which is part of the equity section of the balance sheet.

7. Accounting Period Concept:

An accounting period is the interval of time at the end of which the income statement and financial position statement (balance sheet) are prepared to know the results and resources of the business.

If an organization were not to observe the dual aspect concept,

8. Accrual Concept:

it would use single-entry accounting, which is essentially a checkbook. A checkbook cannot be used to derive a balance sheet,

The accrual system is a method whereby revenue and expenses are identified with specific periods of time like a month,

half year or a year. It implies recording of revenues and expenses of a particular accounting period, whether they are received/paid in cash or not.

so an entity would be limited to the construction of a cash-basis income statement.

9. Period Matching of Cost and Revenue Concept:

This concept is based on the period concept. Making profit is the most important objective that keeps the proprietor engaged in business activities.

If management wants to have its financials audited,

That is why most of the accountant’s time is spent in evolving techniques for measuring the profit/profitability of the concern.

, it must accept the dual aspect concept and maintain its accounting records using double-entry accounting

To ascertain the profit made during a period, it is necessary to match “revenues” of the period with the “expenses” of that period.