October 30, 2016 admin

Tools & Supplies—Service

Expenses

TOOLS & SUPPLIES—SERVICE EXPENSE ACCOUNT
7770/7970

ACCOUNT EXPLANATION
Expenses incurred for small tools and supplies, other than office supplies, for the benefit of the service department.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Torque wrench purchased for cash CD
    Tools & Supplies—Service 7770
    Tools & Supplies—Service—Quick Lane 7970
      Cash in Bank—General 1001
             
  Bill for laundering uniforms of service department employees P
    Tools & Supplies—Service 7770
    Tools & Supplies—Service—Quick Lane 7970
      Accounts Payable—Trade 2100
COMMENTS
  • Expendable small tools with a value of less than $25, or other minor value established by the dealership, or having an estimated useful life of less than one year, should be charged to this account.
  • If amounts involved are significant, supplies purchased in quantities for use over a prolonged period should be recorded in Account 1560, Prepaid Miscellaneous, and charged to expense monthly on a pro rata basis.
  • Charges to this account should have the approval of appropriate management.
  • See also Account 7870, Tools & Supplies—Body Shop.