Are Supplies a Current Asset
Yes, supplies are considered a current asset in accounting. Current assets are those assets that can be easily converted into cash or used up within one year or an operating cycle. Supplies are typically used in the normal course of business operations and are expected to be consumed within a year or an operating cycle, making them a current asset.
On a company’s balance sheet, supplies are usually listed under the “Current Assets” section, along with other items like cash, accounts receivable, and inventory.
Example of Are Supplies a Current Asset
Let’s assume a small business called “ABC Stationery” sells office supplies and also uses some of these supplies for its own operations. Here’s an example of how their balance sheet might look, with a focus on the “Current Assets” section:
ABC Stationery Balance Sheet As of December 31, 2023
Accounts Receivable $8,000
Supplies (for internal use) $2,000
Total Current Assets $40,000
Total Assets $85,000
Liabilities and Equity
… (not shown in this example)
In this example, the supplies used for internal purposes are listed as a current asset with a value of $2,000. This indicates that ABC Stationery has $2,000 worth of supplies on hand that they expect to use within the next year or operating cycle.