A capital good is a durable good (one that does not quickly wear out) that is used in the

production of goods or services. Capital goods are one of the three types of producer goods, the
other two being land and labor, which are also known collectively as primary factors of production.
This classification originated during the classical economic period and has remained the dominant
method for classification.
Capital goods are acquired by a society by saving wealth which can be invested in the means
of production. In terms of economics one can consider capital goods to be tangible. They are used to
produce other goods or services during a certain period of time. Machinery, tools, buildings,
computers, or other kind of equipment that is involved in production of other things for sale
represent the term of a Capital good. The owners of the Capital good can be individuals, households,
corporations or governments. Any material that is used in production of other goods also is
considered to be capital good.
Many definitions and descriptions of capital goods production have been proposed in the
literature. Capital goods are generally considered as one-of-a-kind, capital intensive products that
consist of many components. They are often used as manufacturing systems or services themselves.
Examples include battleships, oil rigs, baggage handling systems and roller coaster
equipment. Their production is often organized in projects, with several parties cooperating in
networks (Hicks et al. 2000; Hicks and McGovern 2009; Hobday 1998). A capital good lifecycle
typically consists of tendering, engineering and procurement, manufacturing, commissioning,
maintenance and (sometimes) decommissioning (Blanchard 1997; Hicks et al. 2000; Hobday 1998;
Vianello and Ahmed 2008). [1]
Differences between capital and consumer goods
One should distinct capital goods from consumption, as the aim of their purchase is different
from production of things. An example of it is a good car, which is normally considered to be a
consumer good as it is bought for a private usage. Nevertheless, dump trucks used by manufacturing
or constructing companies are obviously production goods. The reason is that they assist in creating
things like roads, dams, buildings or bridges. The same way, a chocolate candy bar is a consumer
good, but the machines that are used to produce the candy would be considered production goods.
Some of the capital goods can be used in both production of consumer goods or production ones,
such as machinery for production of dump trucks. It is generally considered that the consumption is
the logical result of all economic activity, but it is also obvious that the level of the future
consumption depends on the future capital stock, and this in turn depends on the current level of
production in the capital-goods sector. Hence if there is a desire to increase the consumption, the
output of the capital goods should be maximized.
Tangible property in law is, literally, anything which can be touched, and includes both real property
and personal property (or moveable property), and stands in distinction to intangible property.

Inventory Vs Expense Item

Expense item- It is the item which is not for sale.

-

Expense Item is the captive consumption of the organization and it will not be transferred to
the inventory hence will not hit the inventory valuation account.

Expense Item is an Non Inventorized and Non Stockable Item, Receiving of Expense item is
possible only by Direct Delivery.

These Items have No Stock Available in System its directly consume after the delivery of Item.
Mainly these are Capital Items which is used as an asset of the company.

Inventory item- It is the item which is available in inventory (Inventory - It is a Go down where
material is stored)
-

Inventory Item will hit the inventory as well as inventory valuation account and it will be used
in production of finished goods.

Inventory Item is an Inventorized and Stockable Item, Receiving of Inventory Item can be
done by
any of the receiving routing
1.Direct Delivery
2.Standard Delivery
3.Inspection Required

Inventory Items are those Items for which we maintain the Inventory/Stock. and Consume in
Production

Those Item that needs to maintain stock and tracking are inventory Items. Creating unique Item
coding for each SKU's
Non-Stock able Items that is direct IN & OUT, are expense items. For such items no need to create
Item code for all. Only few codes can be created and in PR & PO description can be change
For example
Inventory items: Machine parts, Raw Materials, Any Trading Items etc
Expenses Items: Assets, services, Projects, consumables (Office Stationery) etc.
You cannot define an item as expense and inventoried at the same time. But you can define the item
as inventory item.
And when you want to use it as expense, move it to an expense subinventory.

We need to uncheck the attribute "Asset Subinventory" in the specified subinventory.

You should uncheck the asset flag for that subinventory. Make sure that the subinventory accounts
are setup correctly.

http://mahamadsulthanoracleapplications.blogspot.com/2013/04/difference-between-expense-itemand.html
The terminology of items is rather confusing from Purchasing/Inventory point of view.
For easy understanding these will be referred to as A, B and C.
A - Expense Items
B - Inventory Expense Items
C - Inventory Asset Items
A - These items have attributes checked
Purchasable
Purchased
B - These items have the following attributes checked
a - inventory item = YES
b - stockable
c - transactable
d - Inventory Asset Value = NO
e - Costing Enabled = No
C - These items have the following attributes checked
a - inventory item = YES
b - stockable.
c - transactable
d - Inventory Asset Value = YES
e - Costing Enabled = YES