YES.. from what I gather from your question, you have to show the income once your distributor pays you. The inventory sold is showed as expense once it leaves your warehouse. Also, you will have to show entire 100% as income out of which 75% would be received and 25% would be expensed.
Hope this helps...
So, just to clarify, even though my distributor will only pay me 75% of the money (which I will receive) and he will take out 25% (which I will never see), with a cash basis system, I will still need to show the 25% I never see?
Example: I am paid $75. I know that the distributor took $25. My bank account will only show the $75. On my books I will show that I made $100 and paid $25. Is that how it works? And then the same concept with online credit card processing (paypal), where I never get the percentage they take.
Also, with inventory, I'll be expensing inventory on sales long before recognizing the income. Is that what they expect to see with a cash basis system?
YES.. you will need to show and after showing , you will immediately debit it in the same entry.