EXPENSES

by SANDRA
(EDMONTON)

IN MY HAIR SALON I PURCHASE COLORS BRUSHES BOWLS SHAMPOO THAT I DONT SELL. I USE THEM TO PERFORM MY SERVICE.

I RECORD THIS EXPENSE WHERE??? THE ONLY PLACE IN SIMPLY ACCOUNTING IS UNDER COST OF GOODS SOLD.

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Hi Sandra!

Anything that you buy and use in your business to perform a service is either categorized as 'Cost of Goods Sold' or 'Supplies' (an Expense).

If you buy a perm solution that would be termed 'Cost of Goods Sold', because it's part of the cost of performing a perm job.

But if you buy a set of perm rollers, or a bowl to keep them in, that would be 'Supplies', because you use them many times, not just for one job. Like your curling iron or hair dryer.

Hope that helps!

Kathy

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