Hi, @melissa-pennflee. Thank you for reaching out to the Community. I'd be delighted to assist you in sorting out this issue about handling customer payments in QuickBooks Online.
You’ll want to create a journal entry to transfer the payments between accounts. Doing so will zero out the customer’s balance. Here’s how:
- Select + New.
- Select Journal entry.
- On the first line, select an account from the Account field.
- Enter the Equity account as Credit and Income account as Debit.
- Check the amounts - you should have the same amount in the Credit column on one line and the Debit column on the other. This means the accounts are in balance.
- Enter information in the memo section so you know why you made the journal entry.
- Select Save and new or Save and close.
Alternatively, you can also check out this article if you want to use the usual method of refunding a customer: Record a customer refund in QuickBooks Online.
However, I’d also suggest seeking expert advice from an accountant to verify the suggested action. This way, they'll be able to ensure your books are be accurate and error-free.
In the meantime, please review this handy resource that can give you more information about debit and credit and also help you understand accounting journals: Debit and Credit.
If in case you need to make some changes to your journal entry, you'll want to reverse or delete it. Check the detailed steps here: Reverse or delete a journal entry.
I'll be around if you need further assistance about managing your transactions in QBO. I'm very eager to help. Take care!
