Which of the following does not follow Dual Aspect?a)Increase in one asset, decrease in other.b)Increase in both asset and liabilityc)Decrease in one asset, decrease in otherd)Increase in one asset & capitalCorrect answer is option 'C'. Can you explain this answer?

Question

Answer

D) Increase in one asset.

Dual Aspect principle states that every transaction has two aspects: a debit and a credit, and both aspects should be recorded in the accounting system to maintain the balance sheet equation (Assets = Liabilities + Equity). Therefore, any transaction that affects one account must also affect another account, keeping the equation in balance.

Option a) states an increase in one asset and a decrease in another, which follows Dual Aspect as both aspects are recorded. Option b) states an increase in both asset and liability, which also follows Dual Aspect as both aspects are recorded. Option c) states a decrease in one asset and a decrease in another, which also follows Dual Aspect as both aspects are recorded.

Option d) only mentions an increase in one asset, but does not state the corresponding decrease in another account. Hence, it does not follow Dual Aspect.

Answer

C

Answer

Correct, the answer is: C: Decrease in one asset, decrease in other
The Dual Aspect concept in accounting asserts that every financial transaction has equal and opposite effects in at least two different accounts. If there is a decrease in one asset and a decrease in another, it does not comply with the dual aspect concept because there is no corresponding increase to balance the decreases, which would be necessary to maintain the equality of the accounting equation (Assets = Liabilities + Owner’s Equity).

Answer

Answer is option C because ,at a time 2 assets will not decrease it is not rule.

Answer

The Dual Aspect principle in accounting states that every financial transaction has two sides, like two sides of a coin.

a) Increase in one asset, decrease in other:

This is okay because when one thing you own (asset) goes up, another thing you own can go down, and it balances out.

b) Increase in both asset and liability:

This is also fine because if you get more stuff you own (asset), you might have to owe more money (liability), and it keeps things in balance.

c) Decrease in one asset, decrease in other:

This doesn't follow the rule. If one thing you own goes down (asset), there should be a decrease in something else you owe (like liability), but this option doesn't mention that. It's unbalanced.

d) Increase in one asset & capital:

This is good because if you own more stuff (asset), it can also mean you have more money from the owner (capital), and it stays balanced.
So, the correct answer is option 'c' because it doesn't follow the idea that every change should have an equal and opposite effect to keep things balanced in accounting.

Similar CA Foundation Doubts

Which of the following does not follow Dual Aspect?

Capital brought in by the proprietor is an example of

Capital brought in by the proprietor is an example of

If an individual asset is increased, three will be a corresponding

If an individual asset is increased, there will be a corresponding

Top Courses for CA FoundationView all

Quantitative Aptitude for CA Foundation

Accounting for CA Foundation

Business Laws for CA Foundation

Business Economics for CA Foundation

Mock Tests & Past Year Papers for CA Foundation

Top Courses for CA Foundation

Top Courses for CA Foundation

Suggested Free Tests

Related Content

CA Foundation Courses

Other Courses

How To Prepare?

Other Exams

Company