Supplies are considered current assets. This is because the company expects to use the supplies within one year or less. The cost of the supplies is not recorded as an expense until the goods are used or consumed. When a company purchases supplies, it records the purchase as an asset on the balance sheet. The cost of the supplies will be listed as part of the current assets section of the balance sheet until they are used or consumed. Once they are used or consumed, then the cost of the supplies will be moved over to the expenses section of the income statement and will impact net income for that period.