Hello Emma37,
Welcome to the Community page,
You would keep the original expense to show what you have bought so you should record that the money coming back in, you either record the amount for a refund or you record the money coming back in as a separate sale.
If you want to show it as a refund you will need to do a supplier refund for the amount credited on the account and the steps below are what you need to do to show it in Quickbooks.
Refund from your suppliers
1. Create a supplier credit (+ icon -> supplier credit)
2. Choose the correct date and supplier, put in the amount, choose VAT
3. Then click on the + icon again, and choose Bank Deposit, to show that the money went into your bank account
4. Choose the correct bank account on the top left corner, choose the date when the money actually hit your account
5. For Received from choose the correct supplier, for the account choose Creditors, put the amount in, choose no VAT
6. On the Supplier's page create cheque
7. Tick the deposit against the supplier credit (this shows QuickBooks, that the supplier credit has been used, and money was received from the supplier), untick the bill, and save and close
8. Match the deposit against the transaction on your banking screen
Then for the exchange item you would do a bank deposit (plus new>bank deposit to creditors, put the amount and with no vat) and then match the 2 off using the cheque option (expenses>new transaction>cheque>tick the transactions>save) and then match it at the banking page.
