063 E-Commerce Advertising / Fees

Expenses

Semi-Fixed

Synopsis

Account 063, E-Commerce Advertising / Fees is established to record the cost of developing and maintaining the dealership’s Web-Site(s). Other miscellaneous Internet expenses are also posted to this account.

Debits

Credits

Cost to develop Dealer Web-sites
Cost to maintain Dealer Web-sites
Cost to advertise the dealership’s Web-sites on other Internet sites and search engines
Other miscellaneous Expenses related to Internet and E-Commerce support

Example 1

Record the $500 monthly expense for maintaining the dealership’s website. The $500 is distributed to each department as shown in the example below.

Journal: Cash Disbursements and Purchase

Entry:		Debit	Credit
Account 063-01	E-Commerce Advertising/Fees – New Vehicles Department	$125
Account 063-02	E-Commerce Advertising/Fees – Used Vehicles Department	$125
Account 063-05	E-Commerce Advertising/Fees – Mechanical Department	$125
Account 063-07	E-Commerce Advertising/Fees – Parts & Accessories Department	$125
Account 300	Accounts Payable – Trade Creditors		$500

Distribution of Expenses

	Departmental Distribution
063 E-Commerce Advertising/Fees	New Veh.	Used Veh.	Lease & Rental	Mechanical	Body Shop	Parts & Access.	Gen & Admin.
	01	02	03	05	06	07	09
Web-site development & maintenance	Usage	Usage	Usage	Usage	Usage	Usage	Usage
Advertising of Web-site	Usage	Usage	Usage	Usage	Usage	Usage	Usage

Comments

It is not sufficient to develop a Web-site and expect customers to find it by chance. For this reason, Account 063, E-Commerce Advertising / Fees has been created to record the various initial and on-going costs to maintain the dealership’s Web-sites. The expenses should be pro-rated to each Department as indicated in the Expense Distribution chart above.

Departmental Distribution