474A – Other Mechanical/Maintenance Contracts

New Subaru Department

Sales Synopsis

Account 474A

Debits

Credits

 

  1. Income generated from the sale of other than Subaru Service Contracts to new vehicle customers.

674A – Other Mechanical/Maintenance Contracts

New Subaru Department

Cost of Sales Synopsis

Account 674A

Debits

Credits

  1. Adjustments to reduce the amount of income from service contracts other than Subaru Service Contracts.  Use Account 476A – Charge Backs & Repo Losses to record charge backs due to cancellation of service contracts.

 

 

 

Remarks:

 

Income from service contract sales should be determined at the time the deal is finalized.  This allows service contract income to be recorded along with the vehicle sale.  Credit the sales price of the Service Contract to Account 474A and debit the cost of the contract to 674A.  Any subsequent cost adjustments should be charged to 674A.

Charge backs on service contract income from early terminations or cancellations should be charged to Account 476A – Charge Backs & Repo Losses.

Note: