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Balance Sheet Equation Concept
The Historical Cost Concept needs support of two other concepts for practical reasons, viz.
(i) The Money Measurement Concept (already discussed above),
(ii) The Balance Sheet Equation Concepts.
Accounting process, however, conforms to an algebraic equation that, in other words, is included in two laws of nature that is, the law of consistency of matter and the law in which every effect originates from a cause. In relation to the former, it may be deduced which all that has been received through us must be equivalent to all that has been given to us. (In accounts, receipts are categorized as debits and giving or sacrifices are classified as credits).
Q. Define leverage? Meaning of Leverage: - The dictionary significance of the term leverage refers to 'an increased means of accomplishing some purpose'. For instance leverage
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