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Level 1

Recording selling and buying from a commission sale

A portion of my companies sales come from when a local business gives me items to sell for them. They give me the item, I sell it for them, when it sells, I record it like I normally would through a sales receipt. They don't want money, but rather an A/P with me. So, when they need something I can provide, I buy it for them and record it like a regular expense. To get the A/P and everything situated, after a sale occurs, can I just create a journal entry debiting my sales account and crediting their A/P account? And then when I purchase something for them, just do a journal entry crediting my sales account and debiting the A/P account? This is the easiest and most straightforward way I can think of.

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Level 15

Recording selling and buying from a commission sale


@Johnny Run wrote:

A portion of my companies sales come from when a local business gives me items to sell for them. They give me the item, I sell it for them, when it sells, I record it like I normally would through a sales receipt. They don't want money, but rather an A/P with me. So, when they need something I can provide, I buy it for them and record it like a regular expense. To get the A/P and everything situated, after a sale occurs, can I just create a journal entry debiting my sales account and crediting their A/P account?

 

Debiting the sales account lowers total sales.

Use a liability account rather than A/P for that side of things

What you do not say is your commission for the sale, or are you doing it for free?

 

And then when I purchase something for them, just do a journal entry crediting my sales account and debiting the A/P account? This is the easiest and most straightforward way I can think of.

 

Crediting the sales account increases sales


 

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Level 1

Recording selling and buying from a commission sale

No, I keep 30%. But an A/P account is a liability, correct?

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