905 Other Income
Additions/Deductions
Addition to Income
Synopsis
Account 905 is established to record the amount of miscellaneous income received by the dealership. Only the monies, which cannot properly be recorded in any other account, are to be posted here.
Debits |
Credits |
|
|
Example 1
Record $85 of income from vending machines.
Journal: Cash Receipts
Entry: |
|
Debit |
Credit |
Account 201 |
Cash on Hand |
$85 |
|
Account 905 |
Other Income |
|
$85 |
Example 2
Record the $17,043 purchase of a new car from another dealer. The new car inventory value is $16,168, $525 Holdback, $175 LAM dealer contribution and the $175 LAM group contribution are to be recorded as debits to account 905.
Journal: Cash Disbursement
Entry: |
|
Debit |
Credit |
Account 231 |
Inventory - New Cars |
$16,168 |
|
Account 905 |
Other Income (Holdback) |
$525 |
|
Account 905 |
Other Income (LAM Dealer Contribution) |
$175 |
|
Account 905 |
Other Income (LAM Group Contribution) |
$175 |
|
Account 202 |
Cash in Bank |
|
$17,043 |
Example 3
Record the annual increase in the cash surrender value of the life insurance policy owned by the dealership.
Journal: General Journal
Entry: |
|
Debit |
Credit |
Account 291 |
Life Insurance - Cash Value |
$635 |
|
Account 905 |
Other Income |
|
$635 |