471B – Finance Income

Used Vehicle Department

Cost of Sales Synopsis

Account 471B

Debits

Credits

  1. The Adjustments other than charge backs to reduce finance income.  Use Account 476B - Used Charge Back's & Repo Losses to record charge backs due to early pay-off or repossession on recourse contracts.

  1. Net Finance income derived from the sales of finance contracts to various financial institutions.

 

 

Remarks:

Finance income should be determined at the time the vehicle sale is consummated.  Income should then be recorded at the same time the vehicle sale is entered into accounting.

Monthly statements from financial institutions should be reconciled promptly and any discrepancies researched and resolved.  Any under or over statement of income should be charged back to Account 471B.

Charge backs on finance income due to early contract termination or repossession should be charge to Account 476B – Used Charge Backs & Repo losses.

Note: