Expense Category
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What expense category do food supplies come under?
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There is no definitive answer to this question, as food supplies could come under a number of different expense categories, depending on the business. However, some of the most common expense categories for food supplies are 'inventory' or 'cost of goods sold'.

Inventory

If the food supplies are considered to be inventory, then they would generally be recorded as an 'asset' on the balance sheet. The cost of the food supplies would be debited to the 'inventory' account, and the corresponding credit would be made to the 'purchases' account. When the inventory is sold, the cost of the food supplies would be included in the 'cost of goods sold' figure, and would be deducted from the 'inventory' account.

Cost of Goods Sold

If the food supplies are considered to be part of the 'cost of goods sold', then they would generally be expensed in the period in which they are used. The cost of the food supplies would be debited to the 'cost of goods sold' account, and the corresponding credit would be made to the 'purchases' account.

Other Expense Categories

There are a number of other expense categories that food supplies could come under, depending on the nature of the business and the accounting treatment adopted. For example, food supplies could be considered as 'operating expenses', 'direct costs' or 'indirect costs'.

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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
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.

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