Consider the following business activities.

Instructions
(a) For each of the above items, indicate the type of business activity-operating (O), investing (I), or financing (F).
(b) Indicate whether each of the above items would increase (1) or decrease (−) cash. Assume all items are cash transactions. The first one has been done for you as an example.

Transcribed Image Text:

Type of Activity Cash Effect 1. Purchase of goods for resale 2. Purchase of equipment 3. Borrowed money from a bank 4. Purchase of long-term investment 5. Sale of merchandise to customers 6. Issue of common shares 7. Sale of long-term investment 8. Payment of dividends 9. Repayment of money owed to bank 10. Payment of interest on money borrowed from bank