For each transaction a through f, identify its impact on the accounting equation (select from 1 through 6 below).
_____ a. The company pays cash toward an account payable.
_____ b. The company purchases equipment on credit.
_____ c. The owner invests cash in the business in exchange for its common stock.
_____ d. The company paid cash dividends to shareholders.
_____ e. The company purchases supplies for cash.
_____ f. The company workers earn wages this period but are not paid until next period.

1. Decreases an asset and decreases equity.
2. Increases an asset and increases a liability.
3. Decreases an asset and decreases a liability.
4. Increases an asset and decreases an asset.
5. Increases a liability and decreases equity.
6. Increases an asset and increases equity.