310 – Notes Payable – New Vehicles & Demonstrators

Current Liabilities

Accounts & Notes Payable

Synopsis

Account 310

Debits

Credits

  1. Payments of notes on New Vehicles and Demonstrators.

  2. The principal amounts of notes on new cars and trucks transferred to company vehicles, service vehicles, parts vehicles, driver education vehicles, leasing vehicles, etc.

  1. The principal amounts due finance institutions on short-term notes secured by new cars and trucks.

 

Remarks:

This is a control account which should be supported by a subsidiary vehicle inventory schedule designed to disclose all aspects of the new vehicle inventory, finance liability, and sale information.  A detailed record of the unpaid amount due on each new vehicle should be maintained on the vehicle inventory record.

Floor plan notes should be paid off immediately upon sale or disposal of the vehicle.

At month-end, supporting inventory and finance liability schedules should be prepared, which should agree with the respective general ledger account balances.  Any variances should be located, their source determined, and proper disposition made before the Subaru Dealer Financial Statement is prepared.

The monthly finance company statement  should be carefully reconciled to the retailer's records to determine if all payments have been promptly recorded, that payments for all cars and trucks sold have been made, and that no notes have been added in error by the finance company.

All finance liabilities on vehicles transferred should be recorded at the same time the vehicle is removed from inventory.

Note: