Can I record /expense purchases into an inventory account if I am a cash basis business
Under the cash basis, if an enterprise over-purchases to obtain bulk discounts, can the purchase cost be included in inventory and expensed over time as actually used? Based on tax rules and practical conventions, this article analyzes the limitations of inventory treatment under the cash basis and feasible alternatives, helping enterprises improve the accuracy of expense matching while remaining compliant.
Can I purchase items into inventory and expense over time, when using a cash basis accounting system. We purchase larger than needed quantities to get bulk discount pricing. Do I have to expense at time of purchase, or can I expense as items are used? This is not a major part of our business, but would like to be more accurate with expensing items as used. Thank you in advance for any help.