October 30, 2016 admin

Policy Adjustments—Body Shop

Expenses

POLICY ADJUSTMENTS—BODY SHOP EXPENSE ACCOUNT
7850

ACCOUNT EXPLANATION
Expenses related to labor and sublet repairs involved in price adjustments made to customers and correction of faculty workmanship (other than repairs covered by the Ford Motor Company warranty and policy program).
TRANSACTIONS
  Jrnl. Dr. Cr.
  Refund to customer for service price adjustment CD
    Policy Adjustments—Body Shop 7850
      Cash in Bank—General 1001
             
  Cost of technicians’ time in correcting faulty repair work I
    Policy Adjustments—Body Shop 7850
      Inventory—Labor in Process 1440
COMMENTS
  • Correction of overcharges on labor and sublet repairs sold to customers should be treated as a reduction to the sale previously recorded, not as a charge to this account.
  • Charges to this account should have the approval of appropriate management.
  • Policy adjustments allowable under the Ford Motor Company warranty and policy program should be handled as outlined under the Warranty & Policy Claims accounts: 5720/6720 (Service) and 5830/6830 (Body Shop).
  • Variances between amounts claimed and amounts reimbursed under the Ford Motor Company warranty and policy program should be charged to Account 7050, Free Service—New, unless the variance is specifically attributable to the parts department, the service department, or the body shop, in which case the variance should be charged to the Policy Adjustments accounts: 7650 (Parts), 7750 (Service), or 7850 (Body Shop), as appropriate.