220 CMR, 52.209
This account shall include the cost of materials and supplies purchased regardless of whether the same are intended to be consumed in construction or in operation, or later to be sold, including such charges for freight and express as can readily be allocated. Delayed charges, or charges of a trivial nature, covering the cost of transportation on small items, may be included in operating expense account, No. 610-7, "Transportation Expenses." Cash discounts resulting from the prompt payment of invoices shall be credited to the accounts affected, either direct or through the invoices charged to materials and supplies. This account shall also include the cost of all water appliances which are held for sale or to be loaned or leased.
Tools purchased in advance of the immediate requirements of the company shall, unless charged directly to operating expense or construction accounts, be charged to this account. Inventories of materials and supplies should be taken periodically, and any shortages or overages disclosed by such inventories shall be credited or debited to this account, and debited or credited to account No. 610-8, "Inventory Adjustments," in case they cannot be assigned to specific accounts.
When any tangible property is dismantled it shall be treated as retired; the original cost of such property shall be credited to the plant investment account in which it is carried, and the salvage value, based upon fair prices for the particular kinds and grades of material, shall be charged to this account.
Material and supplies taken from stock in excess of the amount actually required, shall, when returned to stock, be charged to Materials and Supplies at the same price at which the account was originally credited, or at the average price of such material if the cost of materials and supplies is kept on an average basis.
220 CMR, 52.209