With reference to ancient India, consider the following statements: [2023] 1. The concept of Stupa is Buddhist ...Read more
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Double-entry bookkeeping is an accounting system that ensures every financial transaction affects at least two accounts, maintaining the accounting equation: Assets = Liabilities + Equity. In this system, each transaction is recorded in two parts: a debit and a credit. The total debits must always eRead more
Double-entry bookkeeping is an accounting system that ensures every financial transaction affects at least two accounts, maintaining the accounting equation:
Assets = Liabilities + Equity.
In this system, each transaction is recorded in two parts: a debit and a credit. The total debits must always equal the total credits, providing a method to check for accuracy.
Key Concepts:
- Debits and Credits:
- Debits increase asset or expense accounts and decrease liability or equity accounts.
- Credits increase liability, equity, or revenue accounts and decrease asset or expense accounts.
- Ledger Accounts:
- Every transaction affects two or more ledger accounts. For instance, when a business purchases equipment with cash, the equipment (asset) account is debited, and the cash (asset) account is credited.
- Balances:
- By recording both sides of the transaction, double-entry bookkeeping creates a balanced system. The sum of all debits must equal the sum of all credits at any given time.
Example:
Suppose a business buys a computer for ₹1,000 in cash:
- Debit the Equipment account (an asset) by ₹1,000.
- Credit the Cash account (another asset) by ₹1,000.
This system provides a detailed, accurate financial picture, minimizes errors, and ensures that the financial statements (balance sheet, income statement) are always balanced.
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Let's review the statements: The concept of Stupa is Buddhist in origin – This statement is incorrect. The tradition of building funerary mounds existed before Buddhism, though stupas became closely associated with Buddhist architecture and practices. Stupa was, generally, a repository of relics – TRead more
Let’s review the statements:
Corrected Answer:
Only two statements are correct.
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