Basic rule to remember is that:-
EVERY FINANCAL TRANSACTION gives RISE TO TWO ACCOUNTING ENTRIES, ONE A DEBIT AND THE OTHER A CREDIT.

Also note that:
(a) An increase in an expense ( example rent) or an increase in an asset ( office furniture) is a DEBIT
(b) An increase in revenue ( example sale of goods or services) or an increase in a liability( buying goods or service on credit) is a CREDIT
(c) A decrease in an asset( example making a cash payment) is a CREDIT
(d) A decrease in liability( example paying a creditor) is a DEBIT

EXAMPLES
(a) Purchase of office equipment
DEBIT: Office Equipment ( increase in asset)
CREDIT: Cash at bank ( decrease in asset re: cash at bank decreases)

(b) Purchase of stationery on credit
CREDIT: Accounts Payable ( increase in liability )
DEBIT: Purchases ( item of expense)

© Payment received from a credit customer
CREDIT: Accounts receivable ( decrease in asset)
DEBIT : Cash at bank ( increase in asset)

Question No 1: Fill In The Blank for the following:

Answer:

1a $30,000 ($40,000-$10,000)

1b $4,000 ($15,000-$11,000)

1c $15,000 ($5,000+$10,000)

1d $3,000 ($11,000-$8,000)

Question No. 2:

The following is the summary data of XYZ Ltd for July presented in equation form. Describe each of the transactions that occurred during July.

Answer:

2a The owner made an investment by injecting cash as capital

2b Equipment was bought and paid for

2c Supplies were bought and paid for

2d Additional equipment was bought on account creating a liability

2e The company recorded an income for work done for customers

2f The company paid salaries to the workers

2g Cash was paid to reduce amount owing to Accounts Payable(Liability)

2h Owner withdrew cash for her personal use.

Actually Pacioli did not invent double-entry bookkeeping,however, on November 10, 1494 he published the first complete textbook, “Summma de Arithmetica, Geometria: Proportioni et Proportionalita” (meaning “ Everything About Arithmetic, Geometry and Proportion”) describing the standard accounting system with such detail and clarity that it became the standard system for keeping accounts. Pacioli painstakingly noted the use of various bookkeeping tools including journals and ledgers. He is widely known as the father of modern bookkeeping.

Background of Frater Luca Bartolomes Pacioli:

• He was born in 1445 at Borgo San Sepulcro inTuscany, Italy. He was a mathematician. He was a friend of the great artist Leonardo da Vinci. At age 37, Frater Luca Pacioli became a Franciscan friar and traveled the country teaching and expounding on mathematics. He did not earn his doctorate degree until 1486, but by that time, he had accomplished a great deal of work in the field of mathematics. He lived until 1517.
• Pacioli was indeed a Renaissance man” in the true sense of the expression, acquiring an amazing knowledge of diverse technical subjects – religion, business, military science, mathematics, medicine, art, music, law and language.
• His friend Leonardo da Vinci helped prepare the drawings for Pacioli’s 1497 work, Divina Proportione; in turn, Pacioli is reputed to have calculated for da Vinci the quantity of bronze needed for the artist’s huge statue of Duke Lidovico Sforza of Milan.
• Around 1482, after completing his third treatise on mathematics, Pacioli – like many of his time who sought preferment as a teacher – he became a Franciscan friar. He traveled throughout Italy, lecturing on mathematics, and in 1486 he completed his university education with the equivalent of a doctorate degree.

In fact, it was Benedetto Cotrugli  who was credited with inventing the double entry bookkeeping process. Cotrugli wrote Delia Mercatura et del Mercante Perfetto (“Of Trading and the Perfect Trader.”) in 1458. It and other hand written manuscripts seem to have circulated in the Italian city states during the 15th century. Cotrugli’s book was not published until 1573 so Paciolo may claim the first published text 

In Pacioli’spublished book: “Summma de Arithmetica, Geometria: Proportioni et Proportionalita” (meaning “ Everything About Arithmetic, Geomeetry and Proportion”), he advocated that the trial balance (summa summarium) is the end of  accounting cycle. Debit amounts from the old ledger are listed on the left side of the balance sheet and credits on the right. The two totals equal, the old ledger is considered balanced. If not, says Pacioli, “that would indicate a mistake in your Ledger, which mistake you will have to look for diligently with the industry and intelligence God gave you.”

An account basically is made up of three parts:

1. A title which is the name of the item recorded in the account;
2. Each account has a space for recording increases in the amount of the item and
3. Each account has a space for recording decreases in the amount of the item.

The account form presented below is called a T-account because it resembles the letter T.

The left side of the account is called the debit side and the right ide is called the credit side.

The amount entered on the left side of an account regardless of the account title are called debits to the account. When debits are entered in an account, the account is said to be debited(or charged) whereas the amount entered on the right side of an account are called credits and the account is said to be credited.

Debits and credits can be abbreviated as Dr and Cr. respectively.

One of the basic fundamental accounting principle is the Dual Aspect Concept which MUST be understood by all.

This dual aspect concept is

1. also called Double Entry Methodology
2. The key points are All transactions have two(2) dimensions and
3. this follows from the basic accounting equation which is:

ASSETS(a)=LIABILITIES(b) + OWNERS’ EQUITY(c)

(a) Assets are the resources owned by a business;

(b) Liabilities are the rights of the creditors, which represent debts of the business

(c) Owners Equity represents the rights of the owner

SIMPLE ILLUSTRATIONS:(1) Y deposits $25,000 in a bank account in the name of Company ABC in return for shares of stock in the company.

(2) The Company paid $20,000 for purchase of a piece of land.

(3) During the month, the company purchased supplies for $1,500 and agreed to pay the supplier in the near future (on account).

(4) The company provided services to customers, earning fees of $8,000 and received the amount in cash

(5) The Company paid the following expenses: wages, $2,000; rent, $1000; utilities, $500; and miscellaneous, $300.

(6) The Company paid $1,500 to creditors during the month.

(7) At the end of the month, the cost of supplies on hand is $500, so $1,000 of supplies were used.

(8) At the end of the month, the Company pays $2,000 to stockholders