October 30, 2016 admin

Accounts Receivable—Parts, Service & Body Shop

Assets

ACCOUNTS RECEIVABLE—PARTS, SERVICE & BODY SHOP ASSET ACCOUNT
1120, 1121, 1122

ACCOUNT EXPLANATION
Accounts resulting from sales of parts and of service department & body shop services on open account to customers and employees.

National Credit Card Discount.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Parts sold to independent garage operator PS
    Accounts Receivable—Parts 1120
      Sales—Parts—Wholesale 5400
             
  Labor sold to service or body shop customer on open account PS
    Accounts Receivable—Service 1121
    Accounts Receivable—Body Shop 1122
      Sales—Labor—Repair Shop 5700
      Sales—Labor—Body Shop 5810-
5820
           
  Payment received on account from customer CR  
    Cash in Bank—General   1001
      Accounts Receivable—Parts     1120
      Accounts Receivable—Service     1121
      Accounts Receivable—Body Shop     1122
             
  Allowance given to customer for service comeback G    
    Policy Adjustments—Parts   7650  
    Policy Adjustments—Service   7750  
    Policy Adjustments—Body Shop   7850  
      Accounts Receivable—Service     1121
      Accounts Receivable—Body Shop     1122
             
  Record the Discount Fee on Repair Work involving use by customer of a Credit Card PS    
    Accounts Receivable—Service   1121  
    Accounts Receivable—Body Shop   1122  
             
    Professional & Service Fees   8860  
      Sales—Labor—Repair Shop     5700
    Cost of Labor Sales—Repair Shop   6700  
      Sales—Labor—Body Shop     5810-
5820
    Cost of Labor Sales—Body Shop   6810-
6820		  
      Inventory—Labor in Process     1440
COMMENTS
  • When preparing Accounts Receivable Aging for financial statement reporting, Parts Receivable are those which are generated by sales to wholesale and counter retail. Service and Body Accounts Receivable are receivables generated in the dealership repair/body shop. Subsidiary records should support this account.
  • At month end, an aging schedule should be prepared for management review. See Account 1110, Accounts Receivable—Vehicles, for method of aging individual receivables. Amounts remaining unpaid on prior months’ transactions should be considered past due and aged accordingly unless special payment terms are established at 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.