Falcon Incorporated has the following transactions.

TransactionFalcons’s related account

1. Falcon provides services to customers.......Service Revenue

2. Falcon pays salaries for the current month. .....Salaries Expense

3. Falcon purchases equipment. .........Equipment

4. Falcon pays dividends to stockholders. .....Dividends

5. Falcon borrows money by issuing a note. ....Notes Payable

Required:

1. For each transaction, indicate whether Falcon would classify the related account as an (a) asset, (b) liability, or (c) stockholders’ equity to be reported in the balance sheet; a (d) revenue or (e) expense to be reported in the income statement; or a (f) dividend to be reported in the statement of stockholders’ equity.

2. Classify the type of activity as financing, investing, or operating.