060 Office Supplies and Expenses

Expenses

Semi-Fixed

Synopsis

Account 060, Office Supplies and Expenses is established to record the cost of various office supplies such as stationery, copy paper, pens, toner, etc. It also includes the cost of daily postage.

Debits

Credits

Cost of Office Supplies and Expenses including:

a. Letterhead & stationery

b. Copy paper

c. Repair Orders

d. Buyer’s Orders

e. Appraisal Forms

f. Odometer Affidavits

g. Invoices

h. Toner

i. Pens & pencils

j. Notepads

k. General Office Supplies

Example 1

Record the purchase of a six-month supply of letterhead and stationery in the amount of $10,410. One-sixth or $1,735 is expensed to each department and the balance of $8,675 is set up in prepaid expense.

Journal: Purchase

Entry:		Debit	Credit
Account 274	Prepaid Expense	$8,675
Account 060-01	Office Supplies & Expense – New Vehicles Department	$607
Account 060-02	Office Supplies & Expense – Used Vehicles Department	$347
Account 060-05	Office Supplies & Expense – Mechanical Department	$434
Account 060-09	Office Supplies & Expense – General & Administrative	$347
Account 300	Accounts Payable – Trade Creditors		$10,410

Distribution of Expenses

	Departmental Distribution
060 Office Supplies & Expenses	New Veh.	Used Veh.	Lease & Rental	Mechanical	Body Shop	Parts & Access.	Gen & Admin.
	01	02	03	05	06	07	09
Vehicle sales invoice	Usage	Usage
Repair orders				Usage	Usage
Parts counter sales invoices						Total Expense
Lease vehicle forms			Total Expense
Bookkeeping and computer supplies	Usage	Usage	Usage	Usage	Usage	Usage	Usage
Letterheads and envelopes for other than direct mail advertising materials	Usage	Usage	Usage	Usage	Usage	Usage	Usage

Comments

Office Supplies should be competitively sourced to obtain the best quality at the best price. There is often a substantial savings for purchasing in bulk quantities. When a large supply is acquired, it should be inventoried. As supplies are used, the remaining inventory should be noted before placing a re-order. Disbursement of supplies should be convenient, but monitored to reduce waste.

As indicated in the Expense Distribution table above, Office Supplies should be charged to each Department based on usage.

Departmental Distribution