Agent-principle accounting

HELLO,

       guys viewing alone will not help any one.. please come out with any idea.... let it be any idea.. all are professional... so we have some idea.. please share...

it will help every one..

thank you

What I feel, if all the risk and ownershop of products are transferred from supplier to you, it cannot be considered as consingment. rather, the commission you paiy shall be allocated to the products you buy through "B" (include in cost of Goods). Consignment transaction is applicable when the risk and ownership still with consignor. I think it will not be your case. "B" is just an agent only rather than Consignor.

so mr b will maintain a sub ledger and not a creditor ledger. but how he will show the balances in his financial reports.. i mean as a debtors or a loan/ advances

As per my opinion, Mr B is acting as a commission agent, because mr b purchased goods on behalf of principal and risk remain with principal.Mr B is concerned only for their commission.

The another relevant point that we should consider is that- whether bill is issued by supplier in favour of B or Principal.

Agree with CA Maya Sankar... If the bill issued by suppliers on "B"'s behalf, you will be creditor to B's Account (incl commission). Like Consignment, on sale: (Debit)Debtor's A/c (Creit)Supplier A/c (Credit)Commission A/c If you pay direct to suppliers, commission is "B" main revenue and account accordingly. (Iam not a professional in this case, correct me if worng)!!!

If the invoice is raised to the principle directly by the suplier then Mr.B will act only as an Agent. In B's account, the principle would be a debtor for commission.

If the invoice is raised by the supplier to B and inturn B raise one more invoice to the principle then B would be a creditor for principle for purchase of goods.

let me clear some more... bills are raised in name of purchaser i.e. its on me. but in selecting the product mr. b helps me.Mr.b does not purchase the goods. he is just a mediator but payment is routed through mr.b to all suppliers. it is clear that there is no consignor consignee relationship... replies are invited... 

"B" can claim his commission after service provided as agreed and realise his commission receivables (Revenue). once you make payment B can record as: (Debit) Cash (Credit) Commission (Credit) Supplier and route payment to supplier: (Debit) Supplier (Credit) Cash To my knowledge, "B" dont need to show suppliers claim on his books and you are debtor to the extend to "only his Revenue, i.e. commission".