Direct and Indirect Expenses Examples List PDF Difference

is printing and stationery an asset

They are also called direct costs and are directly related to the production of the main revenue-generating product or service. An inter-department analysis sheet is prepared at a regular interval such as weekly or monthly basis to record all the inter-departmental transfers of goods and services. It is necessary, as each department is working as a separate profit center. Transfer of the prices of such transactions can be cost base, market price, or duel basis. From an accounting perspective cell phones are normally expensed and not capitalized.

Therefore, it is the primary source for obtaining data related to the company’s essential buying and selling. Directly related to the core “product” or “service” of the company are termed indirect expenses. Expenses or direct costs incurred while manufacturing the main “product” or “service” of the company are termed direct expenses.

Accounting Materials and Office Supplies (Definition, Explanation and Journal Entries)

On another note, you can create an expense and use the Fixed Asset account. I think you have explained very well the reason behind and how this should have been dealt with in real life situation, which makes me more confident now as someone from the real industry confirmed what I suspected. However I think it is difficult to judge in an exam situation – what if the examer has a slightly different idea? I suppose they mark the papers by a standard given answer sheet, but not mark on every individual cases?

What is printing and stationery?

Printing & Stationery Department undertakes the printing works of various State Government departrments as well as Government undertakings. The department supplies printed materials and stationeries to different departments, with a view to bring uniformity in the use of stationeries and printed materials.

As per Wikipedia, overhead or overhead expense “refers to an ongoing expense of operating a business. Overheads are the expenditure which cannot be conveniently traced to or identified with any particular revenue unit”. Our team researched and compiled a list of the most commonly seen direct expenses. The main logic to categorising any expense as direct is to ask yourself, “is the cost directly linked and attributable to the primary income-generating product of the company?


While it may seem as if you are saving money by not hiring an accounting firm to do your books and business taxes, the risk of whether you have done it right or not is always there. The benefits of revenue expenditure are enjoyed for a short time . OFFICE EQUIPMENT / FURNITURE Any big equipment or furniture pieces that are generally over $2500 and are being used for more than one year. Another example is if the business only had 2 office staff and they were spending around £500 per month on tea, coffee and milk what would you as a bookkeeper think? A bookkeeper would maybe surmise that the staff were operating their own business of selling tea and coffee but stealing the business money to do so. I just trying to explain a real life situation as normally a business would not divide it down to that detail as they want to see the main picture.

However, if a company purchases these supplies in a large quantity, it may capitalize them. Revenue expenditures are the opposite of capital expenditures. These usually include expenses incurred on short-term assets or business operations. Instead, they must expense them out in the period to which they relate. Usually, revenue expenditures include repair and maintenance, utilities, printing, and stationery, etc.

Are Office Supplies a Current Asset?

To take the cost of this item as a deduction, you must also treat the item as an expense on your accounting system. Production Costs means those costs and expenditures incurred in carrying out Production Operations as classified and defined in Section 2 of the Accounting Procedure and allowed to be recovered in terms of Section 3 thereof. Delivery Expenses means all costs, taxes, duties and/or expenses, including stamp duty, stamp duty reserve tax and/or other costs, duties or taxes arising from the delivery of the Asset Amount. Here are a few key points to remember when classifying office supplies. Finance cost is the cost of borrowing money, which includes the interest charged on bank loans, overdraft fees, and dividends on redeemable shares.

is printing and stationery an asset

An example of a miscellaneous expense is the cost of staff uniforms. From time to time, however, you will stumble upon an expense that is too insignificant to create a separate category and which neither fits any of the categories of expenses that are created. The office building has an estimated useful life of 20 years at the end of which it is likely to be sold for $80,000. This includes the cost of electricity, natural gas, and the running cost of backup generators. The calculation of the cost of goods sold is pretty straight forward for retail businesses, as you can learn from the example below. Direct expenses can be allocated to a specific product, department or segment.

However, if a company’s core business is buying, selling, and distributing equipment, like printers, then the printers would be considered inventory which is a current asset. There you have it – a rundown on the difference between office supplies, office expenses, and office equipment! Let me know if you have any additional questions, I’d be happy to answer them for you. If the item purchased will significantly impact your financial statements, it will need to be recorded as an asset. For example, a company with a small number of assets will have a lower threshold for purchases than one that has a higher number of assets.

is printing and stationery an asset

Capital expenditure involves huge costs as the value of assets and investments are large amounts. Hence, there is less money spent as compared to capital expenditures. A transaction is only classified as capital expenditure if it crosses a certain limit. It differs from organization to organization to classify what expense will be capital or revenue. Revenue expenditure is recurring in nature which means you need to spend on a periodic basis to derive any benefits from it.

Is telephone an asset or liability?

Startup costs usually must be depreciated, but you can take up to $5,000 of startup expenses and up to $5,000 of organizational expenses during your first year of business. Depreciation is printing and stationery an asset is the permanent decrease in the value of fixed assets due to their continuous use. The repair & maintenance expenses are incurred to maintain the working condition of the fixed assets.

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