444 Other Protection Plans New Vehicles (Sales)

Finance & Insurance Activity

New Vehicle

Sales Synopsis

Account 444 is established to record the Sales of non-GM protection plans by the F & I Department.

Debits

Credits

  1. Chargebacks due to early termination 

  1. The selling price of non-GM Protection Plans sold

 

644 Other Protection Plans (Cost of Sales)

Finance & Insurance Activity

New Vehicle

Cost of Sales Synopsis

Account 644 is established to record the Cost of Sales of non-GM protection plans by the F & I Department.

Debits

Credits

  1. The Cost of Sales of non-GM Protection Plans sold

 

 

Example 1

Record the sale of a non-GM extended warranty sold for $1,500 on a new vehicle sold after the original deal.  The cost of the non-GM extended warranty is $750.

Journal: New Car Sales

Entry:

 

Debit

Credit

Account 220A

Accounts Receivable – Customers – Vehicles

$1,500

 

Account 644

Cost of Sales – Other Protection Plans – New

$750

 

Account 444

Sales – Other Protection Plans – New

 

$1,500

Account 300

Accounts Payable – Trade Creditors

 

$750

Note:

Transactions, which are related, should be recorded in separate sub-accounts.  Sub-accounts serve to keep records organized for future analysis and auditing.  The sub-accounts in these examples are designated by a letter following the account number (suffix).  Please refer to your DSP's instructions for establishing sub-accounts.