October 30, 2016 admin

Promotion—New

Expenses

PROMOTION—NEW EXPENSE ACCOUNT
7130

ACCOUNT EXPLANATION
Sales promotion costs that are directly related to the sale of new vehicles. Includes new car driveouts (factory and other dealers), entertainment of fleet owners, promotional banners and pennants, color and upholstery books, auto show exhibits, salespeople’s business cards, price comparison material, showroom displays, placards, gifts and awards.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Purchase of new vehicle announcement material P
    Promotion—New 7130
      Accounts Payable—Trade 2100
             
  Entertainment of fleet owners CD
    Promotion—New 7130
      Cash in Bank—General 1001
             
  Purchase of space for local auto show exhibit P
    Promotion—New 7130
      Accounts Payable—Trade 2100
COMMENTS
  • Dealers should consult tax counsel for information as to documentation necessary to substantiate travel, entertainment, gifts and awards for income tax purposes.
  • 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.