If you own or run a business, you likely have many office equipment items that you use in your daily operations. These include computers, fax machines, printers and other electronic devices. They help your staff to perform their job more efficiently and provide a more favorable work environment.
How do you categorize these items and record them on your books?
First, you need to understand the difference between supplies and office equipment. The former are expenses that are incurred for administrative and office purposes, while the latter are assets purchased for consumption.
When you purchase office supplies such as paper, ink, pencils and stamp pads, you are usually recording them as an expense, whereas when you buy computer equipment such as computers, a fax machine and printers, you are typically recording them as an asset. However, there are exceptions to this rule and you should consult your accountant on the best way to classify these types of purchases in your accounting system.
Is Office Equipment a Debit or Credit?
The answer to this question is no. Rather, office equipment is a fixed asset account that records acquisition costs of office equipment. It is paired with an accumulated depreciation account, which records the cumulative amount of depreciation related to the equipment.
Office Equipment is a Fixed Asset
If an office equipment item meets the threshold amount qualification, it can be recorded as a fixed asset in your accounting books. This is because these items are generally purchased for a specific purpose and have a long useful life.
A fax machine is considered a fixed asset, as is a computer, since these items are often used for a long time. They are also larger purchases and must be depreciated as they are used, which means that they are generally more costly than office supplies or office expenses.
In some cases, office equipment can be classified as a lease, so you should have a separate account for it that is dedicated to the monthly payments on its lease. You should then record the total amount of your lease on a regular basis.
You can then post the balance of your lease each month to a notes payable account, so you can easily see where you stand financially. This is a good practice and helps to ensure that you are keeping precise records for tax reporting and consistency in your bookkeeping procedures.
What are the most common types of office equipment?
The most common types of office equipment are computers, fax machines, scanners and printers. These are important to any business because they allow employees to work more efficiently and communicate with each other easier.
They also help to protect the company’s confidentiality and trade secrets, so they are an essential piece of equipment in any office. A dictation machine is also considered an essential piece of office equipment, as it allows employees to record information quickly and accurately without hand tearing papers.
There are many other types of office equipment, such as a filing cabinet and a calculator, but these are the most common. These are necessary for any company that keeps files and documents. They also help to keep the office organized and efficient by storing files in a convenient place.