There are several ways for a Market Center to account for E&O. Confirm with your Team Leader how your particular Market Center handles E&O. The following steps illustrate how to account for E&O monthly when your Market Center bills the agents through the DAs.
Note: If your Market Center charges a flat E&O expense through AccountEdge, all steps associated with accounting for E&O will be handled through your monthly checklist and there are no steps to be completed as part of the transmittal process. For more details, go to KWConnect and view the skills video on “E&O.”
- Using the Closed Sales Volume Report, highlight the amount of E&O collected through the DAs for the month.
- In AccountEdge, click Accounts. Click Record Journal Entry.
- Using the last day of the month in which you are transmitting, book the following journal entry using the amount listed on your Closed Sales Volume Report.
- Debit the account “E&O Collected from Agents.”
- Credit the account “KWR Excess E&O Reserve/Payable” for any portion of the E&O up to the account balance equaling 10% of the market centers average sales price or 25 percent of next year’s E&O Premium.
- Credit the account “Special Events Payable” for the excess above 10% of the market centers average sales price or 25 percent of next year’s E&O Premium.
NOTE: The balance for the account “KWR Excess E&O Reserve/Payable” should never exceed the IALC Profit Sharing Accounting Guidelines allowance without Regional Director and KWRI approval. If the account reaches the allowed balance, the excess can be placed in a Special Events account. For more information, refer to the Profit Share Accounting Policies and Guidelines in the Policies & Guidelines Manual under Resources on KWConnect.
- Click Record.