October 30, 2016 admin

Insurance—Buildings

Expenses

INSURANCE—BUILDINGS EXPENSE ACCOUNT
8380/8385/8386

ACCOUNT EXPLANATION
Expense of insurance on buildings and improvements owned by the dealership and used in the automobile business. Includes insurance on leasehold improvements.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Monthly write-off of building insurance SE
    Insurance—Buildings 8380
    Insurance—Buildings—Service—QL/FL/QCSC 8385
    Insurance—Buildings—Parts—QL/FL/QCSC 8386
      Prepaid Insurance 1510
COMMENTS
  • Insurance premiums should be charged to Account 1510, Prepaid Insurance, and prorated monthly over the period to which they apply.
  • Insurance expense on buildings not used in the automobile business should be recorded in Account 9450, Other Deductions.
  • For departmentalization purposes, insurance expense applicable to separate buildings occupied by specific operating departments should be charged to those departments. Insurance on an integrated dealership facility should be distributed to departments as provided in Departmentalization.