**The Accounting Equation:**

The accounting equation is the fundamental principle of double-entry bookkeeping. It represents the relationship between the assets, liabilities, and owner's equity of a business. The equation is as follows:

Assets = Liabilities + Owner's Equity

**The Dual Aspect Concept:**

The dual aspect concept is one of the fundamental principles of accounting. It states that every financial transaction has two aspects – a debit and a credit. The dual aspect concept is based on the idea that every transaction affects at least two accounts in opposite ways. This is the basis of double-entry bookkeeping, where each transaction is recorded in at least two accounts.

**Explanation:**

The correct answer to the question is option 'B', which states that the accounting equation is based on the dual aspect concept. This is because the accounting equation itself is a representation of the dual aspect concept.

The dual aspect concept recognizes that every transaction has a dual effect on the financial position of a business. When a transaction occurs, it affects at least two accounts – one account is debited, and another account is credited. The debits and credits must be equal, ensuring that the accounting equation remains in balance.

The accounting equation, Assets = Liabilities + Owner's Equity, is derived from the dual aspect concept. It shows that the total value of assets owned by a business is equal to the total value of its liabilities and owner's equity.

- **Assets:** Assets are economic resources owned by a business. These can include cash, inventory, property, equipment, etc. Assets are recorded on the left side (debit side) of the accounting equation.

- **Liabilities:** Liabilities are obligations or debts owed by a business. These can include loans, accounts payable, accrued expenses, etc. Liabilities are recorded on the right side (credit side) of the accounting equation.

- **Owner's Equity:** Owner's equity represents the residual interest in the assets of a business after deducting liabilities. It represents the owner's investment in the business and the accumulated profits. Owner's equity is also recorded on the right side (credit side) of the accounting equation.

By following the dual aspect concept, every transaction is recorded in such a way that the accounting equation remains balanced. This ensures that the financial statements accurately represent the financial position of the business.

In conclusion, the accounting equation is based on the dual aspect concept, which recognizes that every transaction has a dual effect on the financial position of a business. The equation represents the relationship between assets, liabilities, and owner's equity and is derived from the concept of double-entry bookkeeping.