October 30, 2016 admin

Advertising—New

Expenses

ADVERTISING—NEW EXPENSE ACCOUNT
7110

ACCOUNT EXPLANATION
Advertising costs that are directly related to the sale of new vehicles. Includes new vehicle advertising in media: newspapers, television, radio, magazines, Internet Advertising (Dealer & Ford sponsored) and direct mail including postage; and the cost of owner registration lists.

NOTE: Does not include data processing fees (use Acct. # 8680).

MEMO: advertising below account 7110 must have account balances which are related to the Internet expenses only.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Billing received for new car advertising on television, newspaper, radio, magazines, and Internet advertising. P
    Advertising—New 7110
      Accounts Payable—Trade 2100
             
  Payment for direct mailing to new truck fleet accounts CD
    Advertising—New 7110
      Cash in Bank—General 1001
COMMENTS
  • The cost of advertising that benefits more than one department should be allocated equitably to the departments involved.
  • For handling of large advertising expenditures that will benefit future accounting periods, see Account 1500, Prepaid Advertising.
  • Dealer Advertising Fund assessments billed on the factory invoice should not be charged to this account.
  • Advertising expenditures that are to be reimbursed by the dealer advertising association should be charged to Account 1130, Accounts Receivable—Other.
  • 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.