1.

Determine the increases and decreases in the five accounting types.

Purchased $6,000 furniture for the office on account.

Assets increase, equity increases.

Assets decrease, equity increases.

Assets increase, liabilities increase.

Liabilities decrease, equity increases, revenues increase.

2.

Choose the appropriate activity.

Borrowed $50,000 from the bank.

Operating activity

Investing activity

Financing activity

None

3.

Choose the appropriate activity.

Paid $3,500 rent.

Operating activity

Investing activity

Financing activity

None

4.

Choose the appropriate activity.

Paid dividends of $25,000 to stockholders.

Operating activity

Investing activity

Financing activity

None

5.

Choose the appropriate activity.

Recorded depreciation of $3,000 for the period.

Operating activity

Investing activity

Financing activity

None

6.

Choose the appropriate activity.

Accrued $4,000 interest expense on a loan.

Operating activity

Investing activity

Financing activity

None