075 Training Expense

Expenses

Semi-Fixed

Synopsis

Account 075, Training Expense is established to record the cost of training for dealership employees. Tuition, books, texts, training materials as well as travel expenses to attend training are posted to this account.

Debits

Credits

Cost of tuition and training materials
Cost of meals, lodging and transportation while attending training schools
Cost of videotapes, books, and other training material for use at the dealership
Cost of participation in the Standards For Excellence (SFE) / Pinnacle programs

Example 1

Record the reimbursement of $648 to a mechanical technician for expenses incurred for meals and lodging while attending training school.

Journal: Cash Disbursements

Entry:		Debit	Credit
Account 075-05	Training – Mechanical Department	$648
Account 202	Cash in Bank		$648

Example 2

Record the payment of $10,000 to GM for the dealership's participation in the Standards For Excellence (SFE) / Pinnacle programs.

Journal: Cash Disbursements and Purchase

Entry:		Debit	Credit
Account 075-01	Training Expense – New Vehicles Department	$3,500
Account 075-02	Training Expense – Used Vehicles Department	$2,000
Account 075-05	Training Expense – Mechanical Department	$2,000
Account 075-06	Training Expense – Body Shop Department	$1,000
Account 075-07	Training Expense – Parts & Accessories	$1,500
Account 300	Accounts Payable – Trade Creditors		$10,000

Distribution of Expenses

	Departmental Distribution
075 Training Expense	New Veh.	Used Veh.	Lease & Rental	Mechanical	Body Shop	Parts & Access.	Gen & Admin.
	01	02	03	05	06	07	09
Tuition for Employees	Department benefited	Department benefited	Department benefited	Department benefited	Department benefited	Department benefited	Department benefited
Salespeople’s kits	Department benefited	Department benefited	Department benefited
Lodging and travel while attending school	Department benefited	Department benefited	Department benefited	Department benefited	Department benefited	Department benefited	Department benefited

Comments

As indicated in the Expense Distribution chart above, Training Expenses should be charged to the employee’s Department. If an employee is assigned to more than one Department, the expense should be pro-rated to the respective Departments.

Note:

As a result of training, an improvement in employee effectiveness should be the intended result. Measuring improvement is often difficult and sometimes the improvement is noticeable only after time has been allowed to apply the training to new situations.

Departmental Distribution