Thesis Statement
In this paper we will give illustrations how certain business transactions are recorded in Accounting. In other words how will a given transaction affect any two of the three namely asset, liability or owner’s equity.
Analysis
1.0 Increase an asset and increase a liability
When a business makes a credit purchase it increases an asset and simultaneously increases a liability. For example say a business concern was to purchase (on credit) raw materials, for processing, into a finished product. On the one hand it is acquiring the asset in the form of raw materials and on the other hand it is creating a liability of ‘Accounts Payable-Trade.’
2.0 Increase one asset and decrease another asset.
Let us take the example where a debtor pays his dues. The company acquires the asset Cash (or check) in bank but the Trade Receivables go down simultaneously. Obviously the debtor has paid the amount which stood in the company’s book as an asset prior to such payment.

3.0 Decrease an asset and decrease owner's equity
This will happen when the owner makes a permanent withdrawal of a part of his Capital. Cash payout will reduce the asset ‘Cash’ and also reduce the Owner’s Equity by an equal amount of course.

4.0 Decrease an asset and decrease a liability
This is an inverse of collection of Trade Receivables. When a vendor is paid this has the effect of reducing the asset ‘Cash’ as well as the liability ‘Accounts Payable-Trade’.
5.0 Increase an asset and increase owner's equity.
When the owner puts in fresh capital this has the effect of increasing the asset ‘Cash’ and also increase the asset ‘Owner’s Equity’.