How do you account for the rebate on an automobile?
The rebate on the purchase of an automobile should be recorded as a reduction of the automobile’s cost.
The lower automobile cost will result in lower depreciation expense.
Learn more about Accounting Principles.
About the Author: Harold Averkamp (CPA) has worked as an accountant, consultant, and university accounting instructor for more than 25 years.He is the author of the 2010 Master Accounting Download Package which has been praised for it's ability to simplify accounting in a way that anybody can understand.
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we are purchasing car from certian suppllier for a long term plan. the agrrement if we reach certain level of delivery, the suipplier will give us rebate.
my question, at the time of purchases we record the vehicle at cost with deprecaitiion of 20% per month. We are engage in leasing of car. We received a rebate within 12 mont. how are you going to record the rebate