October 30, 2016 admin

Finance Contracts—New

Assets

FINANCE CONTRACTS—NEW ASSET ACCOUNT
1020

ACCOUNT EXPLANATION
Amounts due from banks and finance companies on time sales contracts on new vehicles.

Ford Credit Dealer EFT (DEFT)—Recommended Account Entries
TRANSACTIONS
  Jrnl. Dr. Cr.
  New vehicle sales contract accepted by finance institution NV
    Finance Contracts—New 1020
      Sales—New Cars—Retail 3000, etc.
             
  Remittance received from finance institution CR
    Cash in Bank—General 1001
      Finance Contracts—New 1020
             
  Remittance received from Ford Credit—DEFT EFT    
    Cash in Bank—General   1001  
      Finance Contracts—New     1020
COMMENTS
  • Subsidiary records should support this account. At month end, a detailed schedule of the balance in the account should be prepared, showing finance institution, customer name, contract date, date submitted, and amount outstanding.
  • For control purposes, a procedure should be established to insure that amounts due from finance institutions are received promptly.
  • Create a DEFT Journal for appropriate transactions, using a source number in the Cash Receipt/Cash Disbursement Journal series (i.e. 55 or 550). This Journal should be used to record all EFT disbursement and receipt transactions. The net debit/credit balance will match the bank account detail. The hard copy Dealer EFT (COMBAT) report may be used as a source document for the DEFT entries into the dealer accounting system. Create separate journal screens if more than one input person is responsible for DEFT transaction entry. For multiple entry screens, a clearing account can be used to reconcile the multiple DEFT journal input entries, and to reconcile to the Cash Receipt/Cash Disbursement journals.