Celery Company has assets of $150,000, liabilities of $90,000, and equity of $60,000. It buys supplies for cash $5,000. What effect would this transaction have on the accounting equation?

Assets increase by $5,000 increase, equity  decrease by $5000

Explanation:

The accounting equation is expressed as below.

Assets = Liabilities + shareholders equity

Assets are valuable items that the business owns.Liabilities are the debts of the business.Shareholder equity is the owner's capital, plus the retained earnings.

The transaction by Celery Company involves buying supplies valued at $5000 by cash.

Since celery paid cash, no liabilities were incurred. The shareholder money (Equity) decreased by $5000. Supplies worth $5000 were acquired.  The suppliers belong to the business; they are valuable items( assets) to the business.

Admistrational jobs prevent bullying