Floor Plan Accounting Entries

Floor planning is a method of financing inventory purchases where a lender pays for assets that have been ordered by a distributor or retailer and is paid back from the proceeds from the sale of these items.

Floor plan accounting entries. Look at account 240 used vehicles to see what is added to inventory asset and examples of the sale of a vehicle. The arrangement is most commonly used when large assets such as automobiles or household appliances are involved. A floor plan is a method that a business such as an auto dealership can use to finance inventory that they are holding for resale without having to tie up their own capital in that inventory. Floor planning is a form of financing for large ticket items displayed on showroom floors.

This article reviews how you can manage floor plan financing with quickbooks. Floor plan loans are usually made with a one year term and it is a fairly standard practice for the floor plan lender to renew performing floor plan loans year by year. Lenders vary on whether they require a separate payment for interest up to date. Floor plan loans typically require that interest on the outstanding balance be paid monthly.

With floor plan financing you will work with a third party financing institution a floor plan financing company to. The g l impact is a debit to 2110 notes payable a debit to 8050 floor plan costs and a credit to the account designated in misc 1 8 accounting enter account for how you will pay your floor plan costs misc 1 8.