Classification of Stationery
Stationery is treated as an expense for business. Some employees think they waste stationery; others see it as an important tool. The key difference between an expense and asset is timing. An asset represents future economic benefit while an expense’s usefulness is complete.
Stationery for retail is inventory while stationery for administration is an expense. Office supplies are generally and administrative expenses incurred by a company. If you are a trader of stationery items then it’s your inventory classified under current assets. For other businesses, it’s an office expense classified as administrative, general, and selling expense.
Having the right supplies is essential for running a business. Objects such as pens and paper need to be available for employees to work efficiently. The office manager is responsible to buy the stationery.
Stationery on Financial Statements
Printing and stationery expenses are indirect expenses on the income statement. Supplies are current assets until used, then become expenses. Outstanding expenses for stationery are shown in liabilities side of balance sheet.
Financial expenses are those incurred in owning an asset or property. Expenses are crucial to manage operations of a company. Expenses exclude selling costs. Any costs for office supplies, like paper and pens, can be claimed as stationary expenses. Higher priced office expenses are considered assets and can be depreciated.
What Defines a Stationery Asset?
Stationery’s purpose determines if it is an asset or expense. Examples of fixed assets are:
- Manufacturing equipment
- Buildings
- Vehicles
- Computers
In not-for-profit organizations, stationery is an asset.
Stationery is a type of asset that’s characterized by its longevity and prolonged use over a significant period of time. It falls under the category of fixed assets, as it isn’t meant to be consumed or sold quickly. Stationaries encompass a wide range of objects, including but not limited to writing instruments like pens and pencils, paper products such as notebooks and journals, as well as various office supplies such as staplers and calculators.