856 F & I Compensation-Used Vehicles

Finance & Insurance Activity

Used Vehicle

Cost of Sales Synopsis

Account 856 is established to record commissions or other monetary compensation related to the Sales of Finance Contracts and/or Insurance Policies on Used Vehicles.

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 for the F & I Department in the amount of $2,750.

Journal: Payroll

Entry:

 

Debit

Credit

Account 856

F & I Compensation – Used Vehicles

$2,750

 

Account 321

Salaries, Wages & Commissions Payable

 

$2,750