I am an artist and need to buy a lot of raw materials to craft my product. Should I report the buying cost as cost of inventory or supplies under the expenses or both?
Materials include wool, needles, small accessories, pins…
You would put it under one or the other- Inventory means that you had it when you started the year- if you purchased during the year then you would enter it as supplies under the expenses 🙂
Thanks for answering @TurboTaxBrenda ! But I am still not clear about it, since there is another similar thread which tells that inventories we bought in the year is put to "Total purchase during the year". Could you please explain more detail that how I should choose?
The raw materials will go under expenses- if you purchased things that were already made to sell then it would be the cost of goods sold or if you had stuff that you made but didn't sell yet, that would be considered inventory.
