222 - Vehicle Accounts Receivable

Current Assets

Receivables

Synopsis

Account 222

Debits

Credits

  1. The amounts of vehicle sales to customer on open account.

  2. Vehicle customers' checks returned by the bank uncollected.

  1. The amount of vehicle account payments received, not associated with a finance contract.

  2. Appraised value of used vehicles taken in trade.

  3. Accounts determined to be uncollectible.

 

 

Remarks:

The account balance represents the total of all unpaid balances in the vehicle accounts receivable subsidiary ledger, for all open account sales (including non-automotive and other automotive merchandise) sold by the New and Used Vehicle Departments.

 

To minimize collection problems each open account balance should be secured by a contract (discountable at a finance company or bank), or by a properly executed purchase order for commercial, fleet, or municipal accounts.

 

The Sales Manager, or other authorized person, should verify that all vehicle documents are in order and that all cash due on each vehicle sale has been received before the vehicle is released to the customer.

 

Each week, individual customer account balances should be reconciled  with collection follow-up.  The total of the amounts listed in the schedule should agree with the balance in this account.

 

Deposits received from customers on future sales should be credited to Customer Deposits (Account 304).

 

Collection follow-up information should be recorded in the Dealer Management System and on the accounts receivable schedule prepared each month-end.

 

A comprehensive receivable aging analysis is provided at the bottom of Page 1 of the Subaru Dealer Financial Statement.  A diligent, timely, and systematic collection effort of all accounts will lessen bad debt losses.

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