Final answer:
The impact of the debit to consultant expense and credit to accounts payable for $10,000 is an increase in liabilities and a decrease in equity, keeping the accounting equation balanced.
Step-by-step explanation:
The student is asking about the impact of recording a transaction involving a debit to consultant expense and a credit to accounts payable in the context of the accounting equation. In this case, XYZ Company recorded a consultant expense of $10,000 and increased their accounts payable by the same amount in May. The accounting equation, which is Assets = Liabilities + Equity, remains balanced after this transaction because there is an increase in liabilities (accounts payable) that is exactly offset by a decrease in equity (through an increase in expenses which reduce net income and therefore retained earnings).
From a financial perspective, while the company's liabilities have increased with the credit to accounts payable, the company's cash remains unaffected until the debt is paid. In terms of equity, the net income and retained earnings are reduced as a result of recording the consultant expense, impacting the overall equity of the business.