It’s nice to see you in the Community, @Craftygal75.
I appreciate the detailed information about your concern. Based on the scenario, you’ll have to record a refund to your customer using Check and use the COGs account. This way, it will properly be recorded and reduce your bank's balance, and offsets/ paying the customer's prepayment. Let me show you how.
- Click the + New icon and select Expense or Check.
- Choose the customer you want to refund from the Payee drop-down list.
- From the Payment account drop-down arrow, select the bank account where you deposited the payment.
- On the first line of the Category column, select an Accounts Receivable.
- Enter how much you want to refund in the Amount field.
- Fill out the other fields as you see fit, then click Save and close.
Step 2: Link the refund to the customer's credit.
- Select the + New icon and click Receive Payment.
- Choose the same customer you used for the check or expense.
- Fill out the other fields as you see fit.
- Under the Outstanding Transaction section, select the checkbox for the Expense or Check you created.
- Make sure the payment is equal to the open balance, then click Save and close.
For detailed steps, click this article: Record a customer refund in QuickBooks Online.
Once done, you can now record a bank deposit, so you can match it in the bank register. For more information, check out these resources:
When you're ready to assess your business financials, you may consider checking out this article: Reconcile an account in QuickBooks Online. This contains a video tutorial and tips on how to fix any issues during the reconciliation process.
In addition, you can run the Transactions List by Customer report in QuickBooks Online. This will show you the list of income and expense transactions grouped by customers. Just go to Reports and open the Transactions List by Customer report.
Please don't hesitate to tag my name in the comment section below if you need further assistance. I'd be happy to help you succeed. Take care and have a blessed day!
