The Most Complete Way of Differentiating Equipment and Supplies
Rancakmedia.com – Equipment and Supplies, equipment is equipment, while supplies are supplies. These two terms actually have prominent differences, but are related to each other. Especially in terms of implementing the recording of financing in accounting.
In the world of accounting, equipment or tools are goods or tools used by companies to carry out all company activities. The usability of equipment generally has a long-term service life compared to equipment.
Examples of equipment are computers, production machines, vehicles, and so on.
2 Main Categories of Equipment
Equipment is divided into 2 main categories, namely large equipment and small equipment.
Large equipment is a company asset that is likely to be resold or can generate income for the company.
This equipment will also go into the fixed asset balance when purchased which means it will need to be depreciated someday. Real examples of large equipment are buildings, warehouses, computers, vehicles, production machinery, office administrative equipment, and so on.
Small equipment is an item that can meet the needs that have an important role for the smooth operation of the company. Simple examples of these small tools are scissors, storage boxes, staples, and so on. As is the case with large equipment, when small equipment is purchased, small equipment will also be recorded in fixed assets which will undergo a depreciation process.
In a company, of course, we all need various kinds of goods such as paper, pens, printer ink, and various other items that may run out.
These various items will indeed look simple, but have an important role in helping each of the company's operational activities. These items can be included in the equipment category.
So, in essence, in the world of accounting, tools or equipment are various company property that can be consumed or used many times.
In general, various items included in equipment or equipment have shapes that tend to be smaller and aim to meet the needs of the company. So, not the main support for the company's operational activities. But even though it looks small, inventory can also be very expensive, especially for large and well-known companies.