Accounting

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 June 2010 sir,
how to treat accounting entries for super stockist/sub-stockist of mobile phones easy recharges and pre-paid coupons.
1.One super stockist of mobile phones easy recharge purchase easy recharge of mobile currency from bharati airtel ltd. through transfer of balance to the company against RTGS, after getting the stock to his mobile phone,this balance transferred to his sub stockists through his mobile phone. For this he would get 4.5% commission from the company and for such commission he would pass 3.5% commission to his sub stockist. Whether this transaction treated as purchase/sale transaction or net commission transaction.
2. similarly the super stockist bought pre-paid coupons of mobile currency from the company against RTGS, and the stock will receive through courier services, for this he would get some commission. such stock he would resale to his sub-stockist, and give some commission.

How to treat these type of transactions in the financial statements. If they treat these transactions as trading transactions his turnover will cross over 10 crores or more. But he will get only 1% or less commission for such transactions.