Buying services or goods for your own use \u2013 the accounting treatment is the same.<\/p>\n
Essentially something you must realize is that you\u2019re making an expense for your business. Even if it\u2019s buying goods that you will use for your own business, i.e. office supplies or some such, it\u2019s an expense for your accounting.\u00a0<\/p>\n
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\u2019s all on one invoice and from one supplier):<\/p>\n
Db Office supplies (expense account on the income statement) 20<\/i><\/p>\n
Db Other services (expense account on the income statement) 30<\/i><\/p>\n
Cr Accounts payable 50<\/i><\/p>\n
Obviously this entry can be made so that both of those expenses are on the same account, i.e. \u201coffice supplies\u201d etc. Our aim was to show that an invoice could be split onto different expense accounts.<\/p>\n
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:<\/p>\n
Db Inventory 20<\/i><\/p>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Db Other service or Office supplies 30<\/i><\/p>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Cr Accounts payable 50<\/i><\/p>\n
Notice what we did here? We added those papers onto our inventory account and not onto the income statement. Now that we\u2019re selling them, we should show them as a part of our inventory (\u201cgoods held for sale\u201d).<\/p>\n
With services and goods you buy to use yourself you must remember that with one side of the entry you\u2019re showing an expense and with the other reflecting what you still owe for the purchase. You\u2019re accounting nothing to assets.<\/p>\n","protected":false},"excerpt":{"rendered":"
Buying services or goods for your own use \u2013 the accounting treatment is the same. Essentially something you must realize is that you\u2019re making an expense for your business. Even if it\u2019s buying goods that you will use for your own business, i.e. office supplies or some such, it\u2019s an expense for your accounting.\u00a0<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25,35],"tags":[],"class_list":["post-4125","post","type-post","status-publish","format-standard","hentry","category-1-basic-accounting","category-1-7-basic-entries"],"aioseo_notices":[],"_links":{"self":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4125","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=4125"}],"version-history":[{"count":2,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4125\/revisions"}],"predecessor-version":[{"id":4129,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4125\/revisions\/4129"}],"wp:attachment":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=4125"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=4125"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=4125"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}