473B – SAS Mechanical Service Contracts

Used Vehicle Department

Sales Synopsis

Account 473B

Debits

Credits

 

  1. Income generated from the sale of SAS Mechanical Service Contracts to used vehicle customers.

673B – SAS Mechanical Service Contracts

Used Vehicle Department

Cost of Sales Synopsis

Account 673B

Debits

Credits

  1. Adjustments to reduce the amount of income from SAS Mechanical  contracts.  Use Account 476B - Used 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 selling price to 473B and debit the cost of the Service Contract to 673B.  Any discrepancies between anticipated income amount and actual amount earned from Subaru Service Contracts should be adjusted against Account 673B.

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

Note: