What type of account is "Supplies on hand"?

The appropriate classification for "Supplies on hand" is an asset. Assets are resources owned by a business that are expected to provide future economic benefits. In this case, supplies on hand represent tangible items that a business has available for use in its operations, such as office supplies or materials needed for production. These items can be utilized in the current period or held for future use, making them valuable resources.

Regarding the other classifications, expenses pertain to the costs incurred by a business in the process of earning revenue, such as rent or utilities, which do not align with the nature of supplies on hand. Liabilities represent obligations that the business owes to others, such as loans or accounts payable, which again do not apply to supplies that the business retains. Revenue refers to income generated from the sale of goods and services, which is also unrelated to the concept of supplies on hand.

Therefore, understanding that supplies on hand are assets reflects a key aspect of accounting, as it helps in accurately representing a company's financial position on the balance sheet.