October 30, 2016 admin

Accounts Receivable—Vehicles

Assets

ACCOUNTS RECEIVABLE—VEHICLES ASSET ACCOUNT
1110

ACCOUNT EXPLANATION
Customer accounts resulting from sales of cars and trucks on open account, including sales to other dealers.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Sale of fleet units on open account NV
    Accounts Receivable—Vehicles 1110
      Sales—All Fleet Cars 3350
             
  Check received from customer in settlement of open account CR
    Cash in Bank—General 1001
      Accounts Receivable—Vehicles 1110
             
   Write-off of uncollectible account G
    Allowance for Doubtful Receivables 1290
      Accounts Receivable—Vehicles 1110
COMMENTS
  • Subsidiary records should support this account.
  • At month end, an aging schedule should be prepared for management review. The classification of balances according to their age is illustrated for a July 31 listing, as follows:
    Month of Sale
     July
     June
     May
     April and prior    		 Age Classification
     Current
     30 days
     60 days
     Over 90 days

    Amounts remaining unpaid on prior months’ transactions should be considered past due and aged accordingly unless special payment terms were established at the time of sale.

  • To minimize losses on receivables, responsibilities for extension of credit and collection of receivables should be defined, and performance should be reviewed monthly by appropriate dealership management.
  • See Account 1290, Allowance for Doubtful Receivables, for handling of write-offs. Before uncollectible accounts are written off, authorization of management should be obtained.