Buying services or goods for your own use – the accounting treatment is the same.

Essentially something you must realize is that you’re making an expense for your business. Even if it’s buying goods that you will use for your own business, i.e. office supplies or some such, it’s an expense for your accounting. 

Pretending you bought boxes of paper for 20 euros and refilling of the printer cartridge for 60 euros, your accounting entry should be as follows (assuming it’s all on one invoice and from one supplier):

Db Office supplies (expense account on the income statement) 20

Db Other services (expense account on the income statement) 30

Cr Accounts payable 50

Obviously this entry can be made so that both of those expenses are on the same account, i.e. “office supplies” etc. Our aim was to show that an invoice could be split onto different expense accounts.

Taking the same example, if you would be reselling those papers to your customers, your accounting entry for the same invoice would be as follows:

Db Inventory 20

         Db Other service or Office supplies 30

         Cr Accounts payable 50

Notice what we did here? We added those papers onto our inventory account and not onto the income statement. Now that we’re selling them, we should show them as a part of our inventory (“goods held for sale”).

With services and goods you buy to use yourself you must remember that with one side of the entry you’re showing an expense and with the other reflecting what you still owe for the purchase. You’re accounting nothing to assets.