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2.accounting Concepts - Prof. Avanti Sathe
2.accounting Concepts - Prof. Avanti Sathe
Concepts
Cost Concept: The Cost concept states that all the assets
purchased should be recorded at cost price and the cost paid will be
the base for further accounting. Market price of an asset keeps
fluctuating. Hence, it becomes necessary to record the transactions
at cost price.
Dual Aspect Concept: Every business transaction has two effects and involves
exchange of benefits. Benefit received and benefit given, both the aspects should
be recorded in the books. The system which records such dual aspects in the
books of accounts is known as Double Entry System. This principle is also
referred to as the Debit and Credit concept. The account where the benefit comes
in is debited and the account where the benefit goes out is credited.