What is Cost of Purchases vs Materials and Supplies? Does Cost of Purchases not include materials and supplies or is that separate? I do art paintings and wood signs.

[wardlaw-randy]

I buy raw materials, paints, canvases, wood, etc. But is that different from Materials?

[JamesG1]

Perhaps your self-employment activity does not fit the question well.

If you assemble or create a product such as decorative pottery, you purchase raw materials such as paint and clay and record the purchases as Cost of Purchases.

If you fire the clay pots, the costs of maintaining the oven and the cost of electricity to power the oven would be recorded as Materials and Supplies.

Learn more hyperlink states:

Materials and supplies are items that become a part of the finished product, but are not considered actual raw materials.

An example is the use of certain chemicals as part of the manufacturing process for a product.