October 30, 2016 admin

Allowance for Doubtful Warranty & Policy Claims

Assets

ALLOWANCE FOR DOUBTFUL WARRANTY & POLICY CLAIMS ASSET ACCOUNT
1150

ACCOUNT EXPLANATION
Allowance for loss from warranty claims filed that may be uncollectible.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Monthly adjustment of allowance for doubtful claims SE
    Policy Adjustments—Service 7750
      Allowance for Doubtful—W & P Receivables 1150
             
  Write-off of uncollectible warranty claims G
    Allowance for doubtful W & P Receivables 1150
      W & P Claims—Other Manufacturers 1136
      W & P Claims—Cummins 1137
      W & P Claims—Detroit Diesel 1138
      W & P Claims—Caterpillar     1139
      W & P Claims—Ford     1140
COMMENTS
  • All outstanding warranty receivables which are 90 days or more past due from the date of original submission are to be reserved in this account, with the offsetting expense recorded to Account 7750, Policy Adjustments—Service, unless the loss is attainable to other departments.
  • If attainable to other departments, the expense should be recorded to Account 7650, Policy Adjustments—Body Shop, as appropriate.
  • Write-off of uncollectible claims must have prior approval of proper management authorities.