The following transactions occurred during a recent accounting period. For each, tell whether it (1) Increases net income, (2) Decreases net income, or (3) Does not affect net income.

a. Paid dividends

b. Purchased inventory

c. Made sales to customers on account

d. Paid in advance for insurance policy

e. Used some of the insurance purchased in item (d).

f. Collected some cash from customers in item (c).