Supplies for making, shipping, and packaging products are counted as inventory and are part of the Cost of Goods Sold calculation.
At the end of a year, an inventory is taken of these supplies as part of this calculation.
For accounting purposes, business supplies are considered to be current assets.
Is office supplies part of inventory?
Supplies are usually charged to expense when they are acquired. When supplies are classified as assets, they are usually included in a separate inventory supplies account, which is then considered part of the cluster of inventory accounts.
What type of account is supplies inventory?
Supplies and inventory are two expenses and assets you have: Supplies are items you use to run your business or make your product, and inventory refers to goods you’ve made or purchased for sale.
Is office supplies inventory a current asset?
Current assets are listed on the company’s balance sheet and include cash, accounts receivable, prepaid insurance, and office supplies. Non-current assets are items such as land, buildings, and office equipment.
What kind of asset is office supplies?
These are most commonly referred to as “supplies”. Things like computers and desks (which you can obviously sell to someone when you are done using them) are most often referred to as office “equipment” and are usually included in a more general balance sheet as a fixed asset.