853 Repossession Losses – New Vehicles

Finance & Insurance Activity

New Vehicle

Cost of Sales Synopsis

Account 853 is established to record losses due to repossession of New Vehicles.

Debits

Credits

  1. Excess of the amount due over the appraised wholesale value of repossessed vehicles, whether the vehicles are secured by notes held by the dealership or by notes discounted with finance institutions

  2. Losses on repossessed vehicles sold by finance institutions

  3. Repossession surpluses due customers

 

  1. Deficiency settlements on repossessed vehicles

Comments

A debit balance represents repossession losses on previous new vehicle sales.