The difference between cost of purchase, and materials and supplies

[katatertrophie]

I make crafts, so I have materials I use to make products, would i put them in cost of purchases, or would I put this information in materials and supplies?

[bwa · Accepted solution]

If they become part of the physical goods that you sell they would be purchases.

[katatertrophie]

would a laptop I purchased to be able to sell online be considered materials & supplies?

[bwa]

It would not - it would be a depreciable asset.

[katatertrophie]

where would i find that category?

[VolvoGirl]

Go to Business tab- then Continue
Choose Jump to Full List -or I'll choose what I work on

Then…..
Business Income and Expenses - Click the Start or Update button

Then click EDIT by your business name and the next screen should be a list of  topics,
Business Profile, Income, Inventory/Cost of Goods Sold, Expenses, Assets, and Final Details last.
 
Click Start or Update by Business Assets

IRS overview of Depreciation
<a rel="nofollow" target="_blank" href="http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/A-Brief-Overview-of-Depreciation">htt...>

[katatertrophie]

Thank you

[katatertrophie]

would I also list display items, tables, table cloth, lighting, ect? I rent space to set up a booth... so I had to purchase all booth materials, is that start up costs? or would that be in depreciable assets aswell?