Supplies: Assets or Liabilities?

What are supplies considered as on a company's balance sheet?

a. Assets

b. Liabilities

c. Expenses

Answer:

a. Assets

Supplies are considered assets on a company's balance sheet until they are used in the operations of the business. They have future economic value to the organization, which is why they are recorded as assets.

Supplies that have been purchased but not yet used are considered assets on the company's balance sheet. They are recorded as an asset because they have future economic value to the organization.