October 30, 2016 admin

Tools & Supplies—Body Shop

Expenses

TOOLS & SUPPLIES—BODY SHOP EXPENSE ACCOUNT
7870

ACCOUNT EXPLANATION
Expenses incurred for small tools and supplies, other than office supplies, for the benefit of the body shop.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Welding gas purchased on open account P
    Tools & Supplies—Body Shop 7870
      Accounts Payable—Trade 2100
             
  Torque wrench purchased for cash CD
    Tools & Supplies—Body Shop 7870
      Cash in Bank—General 1001
             
  Bill for laundering uniforms of body shop employees P
    Tools & Supplies—Body Shop 7870
      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.