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Hi
I need to ask that how should we treat office supplies in the financial statements, are they treated as an asset when bought and then eventually expensed by whatever quantity we have used or are they treated as an expense completely?Thanks
I assume that you are referring to supplies such as stationery. The expense in the SOPL is the cost of the supplies actually used during the period. Any remaining at the end of the year appears on the SOFP as inventory.
However in the exam this is only relevant if the question tells you that there are supplies still in inventory at the end of the year. If the question does not tell you then you have no choice but to assume that there is no inventory and that therefore the entire purchases were used during the year and appears on the SOPL.
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