295 – Other Notes & Accounts Receivable/Long Term Intercompany Receivable

Other Assets

 

Synopsis

Account 295

Debits

Credits

  1. Loans and advances to subsidiary and affiliated dealerships, including amounts due for merchandise when extended terms have been granted.

  2. Loans and advances to outsiders.

  1. The amount of payments received from subsidiary and affiliated enterprises or outsiders.

  2. Credit notices for returned or refunded goods or services to subsidiaries or outsiders that were originally debited to this account.

  3. Any accounts that were previously debited but now considered uncollectible.

 

Remarks:

A detail of these items should be scheduled and reconciled monthly.

 

Retailers should not make it a practice to loan cash to people or other enterprises if it negatively affects capital position.

 

Intercompany receivables should be kept current, not long term, and cleared with funds exchanged between dealerships each month.  This account is ONLY for those that do not practice funds exchange monthly – but note that this may negatively affect the retailers working capital position, so should be used judiciously.

 

Extended, long-term, or very large balances in this account may be monitored by the factory.

Note: