855 F & I Compensation-New Vehicles

Finance & Insurance Activity

New Vehicle

Cost of Sales Synopsis

Account 855 is established to record commissions or other monetary compensation related to the Sales of Finance Contracts and/or Insurance Policies on New Vehicle sales.

Debits

Credits

  1. The compensation paid to or accrued for employees selling Finance Contracts, Insurance Policies, and Protection Plans

 

 

Example 1

Record the monthly accrual of commissions in the amount of $2,500 for the F & I Department.

Journal: Payroll

Entry:

 

Debit

Credit

Account 855

F & I Compensation – New Vehicles

$2,500

 

Account 321

Salaries, Wages & Commissions Payable

 

$2,500