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Material Expense or Material Asset

HoustonHouston Member Posts: 18

Hello, it's the newbie again. Just want to clarify what I'm doing based on reading the tutorial and viewing past discussions. I'm an Electrician. I buy misc material: Plugs, bulbs, screws, wire nuts, so on and so on... for my truck and use it on various jobs. My billing looks like this: Labor and Materials. That's it pretty much all the time.

Question?????? I'm currently putting this under the Expenses Category (Materials). Is that right? I was told that's what I should put it under...

Or should it be under Assets Category? Which if under Assets, seems like a lot more hoops to jump through, but I'll do it if need be. I now reading where many are doing it under Assets and then a COGS something, something....

I'm just starting out and do not want to get down the road and find out that I should have done another way.

SO WHICH IS IT?

in Accounting Technical Support

Comments

  • MikegMikeg Member Posts: 995 ✭✭✭

    @Houston,
    Materials expense. Assets are items that belong to the business, and have a useful life of greater than 1 year. So for example, the truck you are driving (so long as it is titled in business)

  • HoustonHouston Member Posts: 18
    Thank you very much! :)
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