Recording Transactions

by David Bazile
(Manhattan)

Good Morning Kate,


Hope you are doing well. I am back with another question for you. In the business I work at, the business owner, some time's pays a professional dressmaker to make samples and patterns. How do you record this transaction? This transaction does not occur usually but at times i notice a check written to a dressmaker.
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Hi David!

If the business owner pays another business to make a sample/pattern for her, if that is part of the manufacturing process that she would normally do herself, that would be posted as "Subcontracted Services".

This is a Cost of Goods Sold account.

Hope that helps!

Have a great Holiday David!

Kathleen

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