850 Finance & Insurance Chargebacks
Finance & Insurance Activity
New Vehicle
Cost of Sales Synopsis
Account 850 is established to record Chargebacks from various financial and insurance companies for early termination, by customers, of financing arrangements and insurance coverage.
Debits |
Credits |
|
|
Example 1
Record $4,440 of chargebacks for the month from a finance institution of which $2,793 is for the New Vehicle Department and $1,647 is for the Used Vehicle Department.
Journal: General Journal
Entry: |
|
Debit |
Credit |
Account 850 |
Finance & Insurance Chargebacks – New Vehicle |
$2,793 |
|
Account 851 |
Finance & Insurance Chargebacks – Used Vehicle |
$1,647 |
|
Account 262 |
Due from Finance Companies |
|
$4,440 |
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.