Finance Contracts Income Adjustments—Used

• ACCOUNT EXPLANATION
• TRANSACTIONS
• COMMENTS

Adjustments to income from the sale of used vehicle finance contracts to finance institutions.

*Refer to Chart of Accounts for current applicable Sales/Cost of Sales account numbers

• In instances where the amount of finance income retained by the finance company is based on the total unpaid balance of all outstanding contracts (contingent liability), the finance income on each sale should be charged to Account 1800, Finance Receivables—Deferred, when the sale is recorded. At month end, the current portion of finance receivables should be transferred to Account 1280, Finance Receivables—Current, based on the statement of contingent liability provided by the finance institution.
• Dealership records should be reconciled each month with the statements received from the finance institutions.
• Since special treatment of this account may be required for income tax purposes, dealers should consult their tax counsel.