I have just taken on the accounts for a company that deals with producing amateur stage shows. The invoices that they receive from the theatres show the income received from ticket sales and then the costs involved beneath, such as theatre hire, advertising within the theatre etc. The bottom line is then the reconciling figure of amounts by the theatre to my company.
When posting in sage 50, what is the correct accounting practice - do you post the receipt revenue to the theatre as customer and then indivually post the various costs in theatre suppliers against their nominal codes. To reconcile to the bank, then contra the sales and purchases total?
The reason I ask is that is what I was always lead to believe is correct. However, on taking over this company's accounts, their previous accountants seem to have netted off the figures and posted the bottom line only, with all costs as cost of sales?
