Final answer:
The payment of $600 for supplies not yet used will result in a decrease in both assets (cash) and liabilities (accounts payable), with no impact on total equity, corresponding to option D.
Step-by-step explanation:
When the company pays $600 for supplies previously purchased on account, the payment will decrease the company’s assets, specifically its cash or cash equivalents, by $600. However, because the supplies have not been used yet, there is no change in the supplies inventory, which is another asset. At the same time, this payment will reduce the accounts payable, which is a liability, by the same amount. As a result, there is a corresponding decrease in both assets and liabilities on the balance sheet, but no change in the total equity.
Therefore, the correct option is D. Decrease in Assets, Decrease in Liabilities. Paying off the owed amount decreases the liability, and using cash to make the payment reduces the asset side of the balance sheet.