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Sorry don't laugh at me for this one. What does warranty cost of sale actually mean? My accounting dept is putting all the Warranty part return requests that we get paid the .3 on to warranty cost of sale. I am just trying to find out what it means when it is being applied here.

It means they are screwing you out of .3 that should go into 687.

TimK wrote:It means they are screwing you out of .3 that should go into 687.

THANKS Tim, I kind of am figuring this much. What does it actually mean, or what does it do to the numbers. Im trying to put together something here so I can take it to my gm and say here I don't think this is correct but I need something to go on more then I think my accounting dept is "screwing" me out of it. lol

There is no cost involved, the parts dept. handles the storage of the warranty part and sends it back when requested, therefore the .3 should go towards parts dept. profit (687).

Warranty cost of sale is account 680. This would be where I would put it. 680 is straight gross to the Parts Department. You should see an increase on you gross % for that account.

680 is the COST OF SALE account, it is offset by 242, which is your parts billed out. Any positive to a sale, should go to 480 accounts, that's where gross is generated, by the difference between COST (680) and SELL (480).

I guess if you "credit" 680 you're lowering your cost of sale but that's what 687 is for, right?

The credit put into 680 would decrease the cost of sale, therefor increasing gross profit. This does not affect inventory at all.

STRAUBMAN wrote:The credit put into 680 would decrease the cost of sale, therefor increasing gross profit. This does not affect inventory at all.

yes, what he said ^^^ (Straubman)

~ gt

My Warranty person is putting mine in 022F account. Is this OK or should I push for another account?

mdishong wrote:My Warranty person is putting mine in 022F account. Is this OK or should I push for another account?

That's a salary account.

It's OK if you don't want to earn any money from it.

If not move it to 687 or 680 as posted above.