October 30, 2016 admin

Commissions & Incentives—Salespeople—New

Expenses

COMMISSIONS & INCENTIVES—SALESPEOPLE—NEW EXPENSE ACCOUNT
7000

ACCOUNT EXPLANATION
Commissions and incentives paid or accrued to salespeople on the sale of new cars, trucks, options, accessories, truck bodies and equipment, finance contracts and insurance. Includes incentives based on the performance of the new vehicles department.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Commissions earned by salespeople on new car sales PR
    Commissions & Incentives—Salespeople—New 7000
      Accrued Payroll 2410
             
  Bird-dog fee paid for new car prospect CD
    Commissions & Incentives—Salespeople—New 7000
      Cash in Bank—General 1001
             
  Prizes earned by salespeople on new truck sales PR
    Commissions & Incentives—Salespeople—New 7000
      Accrued Payroll 2410
COMMENTS
  • Bird-dog fees paid to persons other than dealership employees should be charged to this account.
  • Guaranteed minimum commissions paid but not earned through the sale of new cars and trucks should be charged to Account 7100, Salaries—Salespeople—New.
  • Bonuses of new vehicle salespeople based on total dealership profit should be charged to Account 9550, Employee Bonuses.
  • Commissions, incentives, prizes, etc., paid to dealership employees are subject to withholding and should be recorded through the Payroll Journal. Tax counsel should be consulted as necessary.
  • If the new car and new truck activities are organized as separate departments, charges to this account should be distributed directly to the departments generating the expense. See Departmentalization for further information.