as answered by one of the friend, the materiality concept arises in determining the stationery. In a stationery supply company it is an asset. Other companies who is using the material always write off as expenses when it is purchased.
Some co. Consider staionery ad items to be accounted fir so At time of purchase of stationery office supplies r debited by the inv. Amount then at the end of the period an adjusting entry is done to record items on hand
At the end of the period
the concept of MATERIALITY applies here... stationary is a kind of immaterial item so is not included in the balance sheet instead it is expensed off in the income statement... e.g a stapeler which has a useful life of more than20 years, it does not make sense for a company to put it in the balance sheet where there are assets appearing of worth in millions...
entry should be as follows:
Dr Stationary Expense
Cr Cashor payable
however if a company is kind of stationary producer or retailer.. then stationary is to be treated as inventory item...
In case of a big company like a bank or any other type of company, as they are having bulk stationary. You have to net off the ending balance amount of stationary. But it will be separate from any other stock.
Stationeries are always an expense for the company.But If a company deals with stationery purchase and Sales,then we should consider it same like Purchase & Sales.If it is not , we have to consider it as an Indirect expense & it will appear in the debit side of the Profit & Loss Account.In short if stationeries having value at the end of accounting period the treatment will not change.It should be consider as Indirect Expense only.We cannot consider it as closing stock.
