472B – Insurance Income

Used Vehicle Department

Cost of Sales Synopsis

Account 472B

Debits

Credits

  1. Adjustments other than charge backs to reduce Insurance Income.  Use Account 476B - Used Charge Back's & 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 472B.

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

Note: