I do the books for a construction company. I did not set up the initial account on quickbooks. While entering expenses for a tool used with a piece of equipment I noticed that the previous bookkeeper classified this type of thing under the "Tools & Supplies" account which was listed as a COGS. This does not seem right to me. Tools like saws, drills, presses, attachments to larger pieces of equipment (such as augers to drill fence posts or larger holes) are not sold to the customer or used up on the job the way say nails and drywall would be. Supplies to me are things that get used up like paper, nails, files, caulking etc. IMO, the tools should be listed separately in either an equipment account or possibly even an asset account (although, this may be overkill as it is not something that I think we can necessarily track the depreciation on) but it for sure should not be a COGS should it? It should at least be an expense account right? I may be wrong as I am fairly new at this. Help is appreciated.
