October 30, 2016 admin

Finance Contracts—Used

Assets

FINANCE CONTRACTS—USED ASSET ACCOUNT
1030

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

Ford Credit Dealer EFT (DEFT)—Recommended Account Entries
TRANSACTIONS
  Jrnl. Dr. Cr.
  Used vehicle sales contract accepted by finance institution UV
    Finance Contracts—Used 1030
      Sales—Used Cars—Retail 3700
      Sales—Used Trucks—Retail     3750
             
  Remittance received from finance institution CR
    Cash in Bank—General 1001
      Finance Contracts—Used 1030
             
  Remittance received from Ford Credit—DEFT EFT    
    Cash in Bank—General—Net   1001  
      Finance Contracts—Used     1030
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.