Defining Expense Items

We have items that are stocked and transacted on regular basis (Selling, Purchasing etc). Such items are called Inventory Items. These items need to have unique item codes for each of the stock keeping units.

There are other type of items which are like one time purchase and regularly used and not involved in Business transactions like selling. For example all assets which are bought and used on regular basis for company purpose like Vehicles, Computers, Similarly the consumers like Cleaning liquids which are used for company's house keeping.

Please note that there is no absolute definition for any item to come under category of expense or inventory item. It is a relative definition. For example a Vehicle manufaturer treats the vehicles made and sold as inventories. A Company which bought the vehicles to carry their staff will treat the vehicle as Asset.