What Must Be Done If A Transaction Increases Or Decreases The Left Side Of The Accounting Equation
If a Business Transaction increases or decreases the left side of the Accounting Equation , then the right side of the accounting equation must be increased and decreased respectively. This is due to Dual Aspect Concept which states that for every debit, there must be a credit with an equal amount. Examples of such transactions include initial or additional investment made by owner of the business, expenses paid for cash, paid to Suppliers for goods purchased on account, withdrawal of owner from the business for his own personal use, etc. All of these examples either show the increase of the debit side or the decrease of the left side or assets side of the accounting equation but at the same time these examples also show the increase or decrease of the right side whichever is the case, i.e., if the left side is increased, then the right side of the accounting equation must also be increased (e.g., made initial investment, expenses paid, etc.) and if the left side is decreased...