Supplies on hand definition
/Supplies on hand refers to the stock of on-hand supplies of consumable items that is typically maintained by a business to support its operations. Examples of supplies on hand are production supplies, maintenance supplies, and office supplies.
Accounting for Supplies on Hand
If the cost of these supplies is minor, the cost may be charged to expense as incurred. An example entry for this situation is noted next, for a $400 purchase of office supplies that was made on credit.
If the cost of supplies is more substantial, it can be initially classified as an asset, and then charged to expense as supplies on hand are consumed. The accounting in the latter case calls for a periodic inventory count, to determine how many supplies to charge to expense. An example entry for this situation is noted below, for the same purchase of office supplies on credit.
