What is the effect of the following transaction on the basic accounting equation? Purchased supplies for $480 using cash. 1) Assets decrease, liabilities decrease. 2) No entry, no effect. 3) Liabilities decrease, owners' equity increases. 4) Assets decrease, owners' equity decreases. 5) Assets increase, liabilities increase. 6) Liabilities increase, owners' equity decreases. 7) Assets increase, owners' equity increases. 8) Assets increase, assets decrease.