Expense Category
Equipment

What expense category do clothes come under?

There is no definitive answer to this question, as the correct expense category for clothes will depend on the specific business and its accounting practices. However, some possible expense categories for clothes could include:

Inventory

If the clothes are part of the business's inventory - for example, if the business is a clothing retailer - then they would likely be classified as inventory. This would mean that the cost of the clothes would be included in the cost of goods sold (COGS) on the business's income statement.

Merchandise

If the clothes are not part of the business's inventory - for example, if the business is a restaurant and the clothes are uniforms for employees - then they could be classified as merchandise. This would mean that the cost of the clothes would be included in the operating expenses on the business's income statement.

Other

There are many other possible expense categories for clothes, depending on the specific business and its accounting practices. For example, the clothes could be classified as office supplies, advertising, or marketing expenses. Ultimately, it is up to the business to decide which expense category is most appropriate for their situation.

The information provided in this article does not constitute legal or financial advice and is for general informational purposes only. Please check with an attorney or financial advisor to obtain advice with respect to the content of this article.
Clothing
“Accurate classification of expenses is vital for businesses as it forms the backbone of financial reporting, tax compliance, and strategic decision-making. It enables businesses to track and analyze their spending patterns, identify cost-saving opportunities, and assess the profitability of various operations or projects. Having a single source to turn to for accounting classification suggestions, such as the Ramp Expense Classifier tool, is immensely helpful as it provides consistency, reduces ambiguity, and streamlines the expense classification process.”
Audrey Carroll
Senior Manager, Accounting, Ramp
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“As we scale we need tools that are built to scale with us - we need to see expenses real time, we need to see duplicate spend. These types of insights are important to the health of our business.”

Steve Padis
SVP Finance & Strategy, Barry's

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