Hello, @jen21.
There are two ways to handle refund transactions in QuickBooks Online. This will vary depending on the situation that you're in.
If there's a bill associated with the refund, and you're going to pay a lesser amount to your vendor, you can create a vendor credit and apply it to the transaction.
Please take these steps to achieve this goal:
- Go to the Plus (+) icon.
- From the Suppliers column, choose Supplier Credit.
- Select the supplier who issues the credit or refund.
- Enter the date and amount of the credit.
- In the Account Details section, select the expense account used on the original bill.
- Click on Save and Close.
However, if the transaction is solely a refund to your vendors' expense, you can process a bank deposit directly and use the expense account as the account affected.
To do that:
- Select the Gear ⨁.
- Choose Bank Deposit.
- In the Add funds to this deposit section, fill in the following fields:
- Received from: Select or enter the supplier name.
- Account: Select the Accounts Payable account.
- Amount: Enter the cheque amount.
- Select Save and close.
For more information with handling refunds in QuickBooks, here's a great resource that you can check: How do I handle supplier credits and refunds?
Feel free to post a comment below should you need anything else about this or with QuickBooks. Take care!