This is the basic concept of accounting. According to this concept, every financial transaction involves a two-folded aspect, (a)yielding of a benefit and (b) the giving of that benefit. For example, if a business has acquired an asset, it must have given up some other asset such as cash or the obligation to pay for it in the future. Thus a giver necessarily implies a receiver and a receiver necessarily implies a giver. There must be a double entry to have a complete record of each business transaction, an entry being made in the receiving account and an entry of the same amount in the giving account. The receiving account is termed as debtor and the giving account is called creditor. Thus every debit must have a corresponding credit and vice versa and upon this dual aspect has been raised the whole superstructure of Double Entry System of Accounting.
The Accounting Equation, (i.e., Assets=Equities(or Liabilities+Capital) is based on dual aspect concept.
The term 'Assets' denotes the resources owned by the business while the term 'Equities' denotes the claims of various claimants including the proprietors of the business against the assets.
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