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Level 1

We are a used car dealership new to using quick books online. I want to account for buying cars from the auction in my banking section of quickbooks. How should I categorize this?

These vehicles are then reconditioned and sold.  How do I account for the expenses incurred for the reconditioning of vehicles-tires, paint, brakes, etc.  Business Expense? Misc. expenses?

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Best answer 11-14-2018

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Level 9

We are a used car dealership new to using quick books online. I want to account for buying cars from the auction in my banking section of quickbooks. How should I categorize this?

Create an Asset account for "Used Cars" and book the vehicle purchases here (Balance Sheet).

The "reconditioning costs" of the vehicle are a "Cost of Goods Sold" Expense. You can create a sub-account to cost of goods sold specifically for these costs such as "Reconditioning - Used Cars". You can also create a "Cost of Services Sold" account for your actual "Used Car Retail Sales" (fees related to buying the used car) expenses. If the vehicle is put into physical inventory (still an asset) and it declines in value month-over-month it should be written down to the current fair market value.

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Highlighted
Level 9

We are a used car dealership new to using quick books online. I want to account for buying cars from the auction in my banking section of quickbooks. How should I categorize this?

Create an Asset account for "Used Cars" and book the vehicle purchases here (Balance Sheet).

The "reconditioning costs" of the vehicle are a "Cost of Goods Sold" Expense. You can create a sub-account to cost of goods sold specifically for these costs such as "Reconditioning - Used Cars". You can also create a "Cost of Services Sold" account for your actual "Used Car Retail Sales" (fees related to buying the used car) expenses. If the vehicle is put into physical inventory (still an asset) and it declines in value month-over-month it should be written down to the current fair market value.

View solution in original post

Highlighted
Level 1

We are a used car dealership new to using quick books online. I want to account for buying cars from the auction in my banking section of quickbooks. How should I categorize this?

If the vehicle is still in inventory and not sold, why would we record its reconditioning cost under a "Cost of Goods Sold" account? Doing that would not reflect what is actually going on month to month regarding the costs of inventory sold and its reconditioning costs, Instead you would be getting what you sold + all the reconditioning you did for any car (currently in inventory or sold). 

 

What I did is I created an additional "Other Asset" account called "Inv. Reconditioning". I book all the reconditioning costs to that account, and when I book a sale, the reconditioning costs associated with that vehicle go from that account to the COGS "Reconditioning Costs" account.  

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Level 10

We are a used car dealership new to using quick books online. I want to account for buying cars from the auction in my banking section of quickbooks. How should I categorize this?

QuickBooks Online Projects for Used Car Auto Dealership – Used Car Inventory

Helpful article link and download Chart of Accounts (COA) template

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Level 1

We are a used car dealership new to using quick books online. I want to account for buying cars from the auction in my banking section of quickbooks. How should I categorize this?

@cityautogroup please contact me. I am a retired Controller of New Car Dealerships and working as an accountant for Used Car Dealers. I would like to see if I can be of assistance to you.  [removed]

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