Questions: During September, Sally's Hair Salon purchased 900 of supplies on account. In October, Sally's wants to make a payment of 200 on this bill. Record the October transaction into Sally's accounting equation by: (Check all that apply.) decreasing Accounts Receivable, 200. increasing Supplies, 900. decreasing Accounts Payable, 200. decreasing Cash, 200. increasing Supplies, 200.

The answer is:

• decreasing Accounts Payable, \$200.
• decreasing Cash, \$200.

Explanation for each option:

• Decreasing Accounts Receivable, \$200: This is incorrect because Accounts Receivable pertains to money owed to Sally's Hair Salon by customers, not money Sally's Hair Salon owes to suppliers.
• Increasing Supplies, \$900: This is incorrect because the purchase of supplies occurred in September, not October. The October transaction is about making a payment, not purchasing supplies.
• Decreasing Accounts Payable, \$200: This is correct because making a payment on the bill reduces the amount Sally's Hair Salon owes to suppliers.
• Decreasing Cash, \$200: This is correct because making a payment reduces the cash balance.
• Increasing Supplies, \$200: This is incorrect because the payment does not affect the supplies account; it only affects the cash and accounts payable accounts.

Summary: In October, Sally's Hair Salon's accounting equation will reflect a decrease in Accounts Payable by \$200 and a decrease in Cash by \$200.