Accounts Payable—New Truck Equipment – Ford Online Accounting Manual

Liabilities and Net Worth

ACCOUNTS PAYABLE—NEW TRUCK EQUIPMENT	LIABILITY ACCOUNT
	2170

Amounts due trade creditors for vehicle equipment purchased on open account; excludes truck bodies.

			Jrnl.	Dr.	Cr.

Bed-liners purchased for new truck			P
	Inventory—New Truck			1310
		Accounts Payable—New Truck Equipment			2170

Payment of vendor invoice for new truck equipment purchased			CD
	Accounts Payable—New Truck Equipment			2170
		Cash in Bank—General			1001

Subsidiary records should support this account.
New truck bodies recorded in Account 2160.
At month end, the balance in this account should be reconciled to applicable vendor statements.
Debit balances in this account must be investigated and resolved.
Purchase orders authorized by appropriate management should be issued for all purchases. When vendors’ invoices are received, they should be compared with purchase orders for prices, terms, etc., before payment is authorized.
It is important for accounting accuracy that the liability for materials be recorded in the month in which the dealership becomes liable for payment.