Page 13 - DMGT403_ACCOUNTING_FOR_MANAGERS

Accounting for Managers

Notes
1.4.6 Duality or Double Entry Accounting Concept
It is the only concept which portrays the two sides of a single transaction. The law of entire
business revolves around only on mutual agreement sharing policy among the players. How
mutual agreement is taking place?
The entire principle of business is mainly conducted on mutual agreement among the parties
from one occasion to another. The payment of wages is only made by the firm out of the services
of labourers. What kind of mutual agreement in sharing the benefits is taking place? The services
of the labourers are availed by the firm through the payment of wages. Likewise, the labourers
are regularly getting wages for their services in the firm.

Payment of Wages = Labourers’ service
In the angle of accounting aspects of a firm, the labourer services are availed through the
payment of wages nothing but the mutual sharing of benefits. This is denominated into two
different facets of accounting, viz. Debit and Credit. Every debit transaction is appropriately
equated with the transaction of credit.
All the above samples of transactions are being carried out by the firm through the raising of
financial resources. The resources raised are finally deployed in terms of assets. It means that the
total funds raised by the firm are equated to the total investments.
From the Table 1.1, it is clearly evidenced that the entire raised financial resources are applied in
the form of asset applications. It means that the total liabilities are equivalent to the total assets
of the firm.

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