What Is the Meaning of Stock-in-Trade?
Stock-in-trade means any type of tools, merchandise or supplies that a company or professional uses to carry out their business. Stock-in-trade can also mean anything that resembles the tools (or is metaphorical equipment) of a professional.
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Definition
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The Merriam-Webster Dictionary defines stock-in-trade as "the equipment, merchandise or materials necessary to or used in a trade or business." The dictionary supplies a secondary definition of "something that resembles the standard equipment of a tradesman or business, such as 'humor was her stock-in-trade as a writer.'"
Examples
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Stock-in-trade can be any object that is essential to a business's operation. Stock in a restaurant is silverware, tables, napkins, pans, stoves and ingredients, for example. Stock in a carpenter's workshop includes different types of wood, nails, hammers, awls, hinges, sandpaper and other supplies.
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Small Businesses
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Stock-in-trade is one of the main expenses in running a small business, along with payroll expenses. Business owners must buy stock to produce any merchandise or service, but are not always guaranteed that the money spent on the stock will be regained through sales.
Taxes
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Stock-in-trade is one of the few things that is not considered a capital good by the Internal Revenue Service. Stock does not need to be reported on taxes, as the initial cost is generally deducted as a business expense and any money generated from stock will eventually be taxed as part of the business's profit.
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References
- Photo Credit making fresh ground coffee image by scalesy from Fotolia.com
