It seems the same principle as hairdressers hiring chairs in a salon.
All receipts are being processed as an agent of a third party and the shelf hire is the equivalent of commission.
The proprietor should not really be recording those sales within their own books at all as they are nothing to do with them. However, I appreciate that the setup means that the client will have a mixed bag from several shelves all going to different shelf owners so maybe the best approach would be to treat the products from different shelves as different departments.
All receipts for the departments/shelves owned by others with be passed on to the owners less the hire of the shelf (if that is the way that the arrangement has been structured) alternatively all receipts are passed on and the shelf hire is separate which may actually be a cleaner way of recording the transactions.
The money received should not be recorded as sales as they were not sales of the business concerned but rather sales by a third party collected by your client.
The receipts are actually a liability to your client rather than an asset so
Dr Bank Cr seller Liability account
then when paying the person hiring the shelf
Dr Seller Liability Account Cr Bank
So at the end of the period the hired shelf sales went nowhere near your clients sales figure.
That's my take on it.
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I would keep client sales and stock in a spreadsheet just to keep tabs on the ins and outs of the clients wares, wouldn't touch my books with someone else's stock and sales, my Banana Bending Co. books are terrible enough already without adding someone else's paperwork lol.
