Does your unit purchase goods which are held for resale purposes? If so, see below for some tips to keep in mind:
- When purchasing goods that are held for resale purposes, expense account code 187100, Purchase of Goods for Resale should be debited when making the purchase. This will help ensure that the related expense is properly classified for financial statement reporting purposes.
- For example, if you purchase merchandise, supplies, books, publications, or some other type of tangible property that you plan on selling to your customers as a part of a self-supporting operation, then these purchases should be debited to the 187100 expense account code on the related self-supporting fund where the eventual revenue will be credited to. This will ensure proper matching of expense and revenue.
- However, if you are simply purchasing consumable supplies that will be used as a part of your daily operations (as opposed to being purchased for resale purposes), then you’d need to debit a consumable supplies expense account code when making those types of purchases.
- For example, if you were buying paper that will be used for your office’s daily printing needs, then you would code this purchase to a consumable supplies expense account code, such as 121100, Consumable Office Supplies.
Contact
For questions related to this topic, refer to the Account Codes section of UAFR’s Who to Ask list.
