Refrigerant gas stock on hand
Hi,
I'm a sole trader and I buy various types of Refrigerant gas for refrigeration systems that I use occasionally when I need to gas up a system. The refrigerant cylinder I buy comes in 12Kg of refrigerant gas. Now I don't use all the gas at once but I use it when I need too i.e. 2 - 3kg at a time.
When I create an invoice I sell to the customer and make a markup on the gas what account should be used in this instance? Is this an asset or would this be considered an expense, or could I use both?
Hi Moose1,
Thank you so much for your detailed post and my apologies for the late response.
In this kind of situation, it's a great idea to consult with your Accountant for the most precise guidance. From what I know, purchasing the refrigerant gas is generally viewed as an expense. But considering that you sell it to customers with a markup, treating it as inventory or stock might provide a more accurate representation. Using both expense and asset accounts might not capture the full picture accurately. Tracking it as inventory or stock could better align with the buying and selling dynamics of this product in your business. Consulting your Accountant will ensure you choose the most suitable approach for your specific circumstances.
Feel free to post again, we're happy to help!
Regards,
Earl
