What type of account do Supplies fall under?

Supplies are categorized as an asset because they represent resources that a business owns and expects to provide future economic benefits. When a company purchases supplies, it is investing in materials that can be used to generate revenue or maintain operations. Although supplies may be consumed or used up over time, until they are utilized, they are recorded as an asset on the balance sheet.

This classification as an asset reflects the idea that supplies will ultimately contribute to the production of goods or services and thus enhance the company's value. Other categories, such as liabilities or owner's equity, pertain to obligations or the net worth owner's stake in the business, neither of which accurately describes supplies. While supplies can lead to expenses when consumed, their status as an asset is maintained until the moment they are used.