Operating supplies are materials, equipment, and tools used
in the daily operations of a business. These items are essential for the smooth
functioning of the business and are consumed or used up in the short-term.
Features of Operating Supplies:
- Consumable:
Operating supplies are items that are used up or consumed during the
regular operations of a business.
- Short-Term
Use: Operating supplies are meant for short-term use, usually within a
year or less, and are not considered as long-term assets.
- Small
Cost: Operating supplies are typically small-cost items and are not
significant enough to be recorded as assets.
- Essential
for Operations: Operating supplies are crucial for the daily operations of
a business and play an important role in maintaining the smooth
functioning of the company.
- Re-orderable:
Operating supplies are items that are regularly re-ordered and restocked
as they are consumed in the course of business operations.
- Variable
Cost: Operating supplies are considered as a variable cost and are recorded
in the income statement as expenses.
In conclusion, operating supplies are a vital part of any
business, as they help to maintain the smooth flow of daily operations. These
supplies should be regularly monitored and restocked to ensure that the business
continues to run smoothly.
