472A – Insurance Income

New Subaru Department

Cost of Sales Synopsis

Account 472A

Debits

Credits

  1. Adjustments other than charge backs to reduce Insurance Income.  Use Account 476A – Charge Backs & Repo Losses to record charge backs due to early termination or cancellation of insurance for any reason.

  1. Commissions earned on credit life, accident and health insurance sold to customers.

 

 

Remarks:

Insurance commission income should be calculated at the time the deal is finalized.  Insurance income should then be recorded in the accounting records at the time the vehicle sale is recorded.

Insurance carriers should provide detailed schedules of commissions owed and/or paid to the retailer.  Reconcile these schedules against the insurance income recorded for each transaction.  Any discrepancies of income calculation should be charged back to Account 472A.  Record the net of selling price, less cost of the contract in this account.

Charge backs on insurance income for early termination or due to vehicle repossession should be charged to Account 476A – Charge Backs & Repo Losses.

Note: