Dual Aspect Concept | Duality Principle in Accounting


Dual Aspect Concept, also known as Duality Principle, is a fundamental convention of accounting that necessitates the recognition of all aspects of an accounting transaction. Dual aspect concept is the underlying basis for double entry accounting system.


In a single entry system, only one aspect of a transaction is recognized. For instance, if a sale is made to a customer, only sales revenue will be recorded. However, the other side of the transaction relating to the receipt of cash or the grant of credit to the customer is not recognized.

Single entry accounting system has been superseded by double entry accounting. You may still find limited use of single entry accounting system by individuals and small organizations that keep an informal record of receipts and payments.

Double entry accounting system is based on the duality principle and was devised to account for all aspects of a transaction. Under the system, aspects of transactions are classified under two main types:

  1. Debit
  2. Credit

Debit is the portion of transaction that accounts for the increase in assets and expenses, and the decrease in liabilities, equity and income.

Credit is the portion of transaction that accounts for the increase in income, liabilities and equity, and the decrease in assets and expenses.

The classification of debit and credit effects is structured in such a way that for each debit there is a corresponding credit and vice versa. Hence, every transaction will have 'dual' effects (i.e. debit effects and credit effects).

The application of duality principle therefore ensures that all aspects of a transaction are accounted for in the financial statements.


Mr. A, who owns and operates a bookstore, has identified the following transactions for the month of January that need to be accounted for in the monthly financial statements:

1. Payment of salary to staff2,000
2. Sale of books for cash5,000
3. Sales of books on credit15,000
4. Receipts from credit customers10,000
5. Purchase of books for cash20,000
6. Utility expenses - unpaid3,000

Under double entry system, the above transactions will be accounted for as follows:

Account TitleEffectDebitCredit
1. Salary ExpenseIncrease in expense2,000
Cash at bankDecrease in assets2,000
2. Cash in handIncrease in assets5,000
Sales revenueIncrease in income5,000
3. ReceivablesIncrease in assets15,000
Sales revenueDecrease in income15,000
4. Cash at bankIncrease in asset10,000
ReceivablesDecrease in asset10,000
5. PurchasesIncrease in expense20,000
Cash at bankDecrease in asset20,000
6. Utility ExpenseIncrease in expense3,000
Accrued expensesDecrease in asset3,000