Our company purchased some cheap shirts from a local retailer and had our company logo sewn onto them. I put this expense into "Office Supplies", but recently learned that perhaps company uniforms should be put into their own account: "Company Uniform". Which way is GAAP compliant? Does it matter?
USA Company Uniform
- Thread starter Tyson
- Start date
You need a separate account if you 1) wish to track particular expenses or 2) you do not want to combine expenses into an account that is specific for a particular expense. Either way is OK for GAAP. It is up to you to decide. If the expense for shirts is not much then record it to an existing expense account. If it is significant, then decide if you want a separate account.
It's really up to you, but think about this--would you want to know about this expense in a more granular fashion going foward? (ie, how much did we spend on uniforms last year?) If so, create a new expense account for it.
I'm not sure about your accounting package, but a lot of them allow you to move expense accounts into another expense account as a subaccount easily, so later on if you wanted to combine them it wouldn't be as hard as separating them.
I'm not sure about your accounting package, but a lot of them allow you to move expense accounts into another expense account as a subaccount easily, so later on if you wanted to combine them it wouldn't be as hard as separating them.