What expense category does equipment come under?
There is no easy answer to this question as it depends on the type of equipment and how it is used by the business. However, we have compiled a list of the most likely expense categories that equipment would fall under, to help you make the best decision for your business.
Capital expenditures are usually larger purchases that the business intends to use for a long period of time. This could include items such as machinery, vehicles, or office furniture. These items are usually recorded as assets on the balance sheet.
Operating expenses are the costs associated with running the day-to-day operations of the business. This could include items such as office supplies, maintenance contracts, or repairs. These items are usually recorded as expenses on the income statement.
There are other expenses that could fall under either capital expenditures or operating expenses, depending on the specific item. For example, computer equipment could be considered a capital expenditure if it is long-term and used for business operations, or it could be considered an operating expense if it is leased or rented. The best way to determine which category is best for your business is to speak with your accountant or financial advisor.