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प्रश्न
"Every transaction affects at least three accounts." Comment.
उत्तर
- Every transaction affects two accounts and not at least three accounts. Every transaction has two aspects - one is debit and another is credit.
- According to this principle, every business transaction has a double (dual) effect on the business. This double effect can be recognised only by recording both the aspects of every transaction.
- There are two sides of every transaction. If one account is debited, any other account must be credited and vice-versa. The system of recording transactions on the basis of this principle is known as 'Double Entry System'. It is due to this principle that the two sides of the Balance Sheet are always equal.
संबंधित प्रश्न
Explain the Business Entity Concept.
Explain the Money Measurement Concept.
The retirement of manager of the company cannot be recorded in the book of accounts, because it is not possible to estimate the financial effect of retirement. Which accounting principle would be applicable for the above statement?
Define the term GAAP.
This concept assumes that the business will continue to exist for a long time in the future.
This principle suggests that every debit has a corresponding and equal credit.
According to this principle, revenue is deemed to be realised when the goods have been transferred or the services have been rendered to a customer.
Name the basic principles of accounting.
Explain the expense principle.
Name any four concepts of GAAP.
