consignment customer is both vendor and customer

Can you give an example of this relationship? I work with artists who offer things on consignment but also sell things directly to a store I do books for. In both cases they are a vendor because the store is obtaining something from the person. A few artists occasionally buy stuff in the store and its only on those occasions where they are customers. Try using the word "obtain" rather than buy/sell. Any time you obtain something its from a vendor and any time someone obtains something from you they're a customer. IMO its more important to be accurate in your vendor/customer lists than to save the 30 seconds it takes to setup a vendor or customer. If you try to sell things to a vendor then you end up with vendor credits and it can get pretty messy on paper. Same happens when you buy from a customer, you end up with customer credits.

Good question, I defer the answer to the experts here that specialize in mumbo jumbo.

Thanks for your quick response. We sell on ebay for people that bring items into the store. We collect a listing fee. (Service for a customer). We then list it and when it sells we collect the proceeds from the buyer (customer purchase). We then pay the money to customer 1, less a commission. It just seems to me that both the buyer and seller are customers as they pay the store. Wendell

Okay so you're a broker. Your in-store "customer" is actually your vendor and the Ebay buyer is your customer. You sold to the Ebay buyer and you paid money to the in-store item provider. I'd recommend double-checking this with your accountant as there are several ways to handle things like this but here's how one particular retail art gallery handles this setup:

Three Other Current Liability Accounts:

-Consignment Transactions -Due to Consignor -Consignments

Income Account

-Consignment Income

Consignor brings a picture for resale. Enter the item into inventory with the correct wholesale/retail amounts listed (this would be customer amount on cost side and amount+commission on sale side). Under inventory asset change it to Consignment Transactions:Consignments.

Quickbooks automatically assigns the other side of this entry to Opening Balance Equity which is wrong. In the Chart of Accounts go into the Consignments register, double-click on the computer you just setup, then in the Inventory Adjustment window change the Opening Balance Equity drop-down at the top to Consignment Transactions:Due to Consignor.

You now have two Other Current Liability accounts that match. When you sell the computer on Ebay you record the sale to the Ebay customer. The computer item will then come out of Consignments but not out of Due to Consignor. Your Due to Cosignor account will remain higher than the Consignments account until you pay the consignor for the sale.

It seems like alot of work and it is in item setup if you do this on a large scale so I reiterate the suggestion to speak with an accountant about this particular procedure.

Sorry, I used picture and computer when I only meant to use one of them.