How do we account for supplies? Are they included in inventory or have a separate account in the balance sheet?
Example :
Company X acquired inventory that cost Y .
Company X acquired supplies that cost Z .

Inventory and supplies are two different things. It's a little confusing, because we can refer to an "inventory" of supplies, because inventory is a word that can be used generically for all sorts of stuff. That is, we use the word meaning the same thing it does in English. ;) (You could take an inventory of your household possessions.)

But the account called "inventory" is a different thing. That is only for things that were purchased/made for resale, used for merchandising and manufacturing businesses.

Take Office Depot... they sell supplies. To them that's their inventory, because that's what they sell. But they also use supplies. So that's then supplies. So the same item can be inventory or supplies, based on its purpose.

Your examples are specific about what they are.

Yeah, it is a bit confusing :)
Thank you very very much for enlightening me :)

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Originally Posted by morgaine300

Inventory and supplies are two different things. It's a little confusing, because we can refer to an "inventory" of supplies, because inventory is a word that can be used generically for all sorts of stuff. That is, we use the word meaning the same thing it does in English. ;) (You could take an inventory of your household possessions.)

But the account called "inventory" is a different thing. That is only for things that were purchased/made for resale, used for merchandising and manufacturing businesses.

Take Office Depot... they sell supplies. To them that's their inventory, because that's what they sell. But they also use supplies. So that's then supplies. So the same item can be inventory or supplies, based on its purpose.

Your examples are specific about what they are.

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