My client has a storefront where she sells others goods. She does not track inventory at all. She writes these vendors a check each month for their items sold in the store she keeps track by saving the price ticket off the items. My question is how do I account for these people? Are they 1099's? Are they or Should the checks be set to sale of product income so that it debits directly from that bucket? Help, please! Clearly my brain is not functioning.
the cost of what you sell is COGS, so expense the purchase to that account
1099 only applies to companies that are taxed as a sole proprietor or partnership, if in doubt ask for a form w-9, it is a downloadable form. Most large companies are a corporation, no 1099 needed
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