Customer Credit made when Journal Entry entered for Inventory Product Giveaway

Hello there, @LSBookkeeping.

It's normal to see a credit memo under the dummy customer after creating the journal entry (JE). In the process, the amounts directly impact the credit side of the Accounts Receivable (A/R), resulting in a posted credit amount under the customer. 

Since we haven't received an actual amount for your promotional giveaway items, we will use the credit memo to apply against the invoice and close the transaction. Given that you have already created the invoice and the credit memo, let's proceed with the recording by following the steps below:

1. Go to the Customers menu and select Receive Payments.
   
2. Select the dummy customer from the Received From dropdown.
3. In the Unused Credits box, click Apply Credits. 
   
4. Check the Available Credits to apply against the invoice.
5. Click Done.
   
6. Finish the process by following the onscreen instructions.

To learn more about running reports, visit this resource: Understand Reports. It contains information on how to customize, memorize, and schedule reports in the program to gain insight into your financial health.

Should you need further assistance or have questions about managing promotional entries or memos, @LSBookkeeping, don't hesitate to post them in this thread. I’m always here to help. Have a good one!

Step 4 of the original instructions already has me apply the credit to the invoice.  Your reply does not solve the issue but attempts to duplicate step 4.  

This is what the customer is now showing after the GJE and Invoice being "paid" by the credit.

This does not solve, but instead duplicates a step in the original instructions for this issue.  Hence why the instructions link was included in my post.  This is what the customer record now looks like and you see the issue with the customer having a credit even though the credit memo has been applied.  

Hello, @LSBookkeeping.

When you encounter uncollectible invoices in QuickBooks Desktop (QBDT), such as those from product giveaways, it's essential to record them as bad debt and write them off. This process ensures that your accounts receivable and net income are accurately reflected. I'll guide you through the steps to do this properly.

A bad debt is an outstanding customer debt that is considered uncollectible, and it appears as an expense on your profit and loss statement. Follow these steps to record it in QBDT:

1. Navigate to the Lists menu and choose Chart of Accounts.

2. From the Account menu at the bottom, click New.

3. Select Expense, then Continue.

4. Enter an Account Name, for example, Bad debt.

5. Click Save and Close.

Next, you'll need to close out the invoice for your dummy customer. Here’s how:

1. Click the Customers menu and select Receive Payments.

2. Enter the customer's name in the Received from field.

3. Set the Payment amount to $0.00.

4. Click on Discounts and credits.

5. In the Amount of Discount field, input the write-off amount.

6. Choose the bad debt account you created previously from the Discount Account and click Done.

7. Click Save and Close.

Once you've completed this process, consider generating a profit and loss report to assess your business’s financial position.

Additionally, QuickBooks also allows you to customize any report that you generate. You can add or delete columns, adjust the header and footer information, and even personalize the font and style of the report.

After customizing your report, do you also need help with memorizing it? Let me know, and I'll be glad to assist. Just click the Reply button below if you have any additional questions about managing promotional entries in QBDT, and I’ll respond quickly. Have a great day.

@LSBookkeeping 

The link from QB in your original post is the most convoluted way of donating products that I have ever seen.  There are many ways that are significantly easier to record a product giveaway:

1) Go to Vendor > Inventory Activities > Adjust Quantity/Value on Hand.  Select the item and select your promotional expense or COGS account under 'Adjustment Account.

2) If you want this recorded on an invoice (not sure why you'd want that), sell the item for $0 on an invoice.  There's no purpose in selling the item for the normal price, then creating a journal entry to offset that income that needs to be applied to the open A/R.  Such an unnecessary step.  Just sell it for $0.  Then, reclassify the COGS expense to a promotional expense with a journal entry: debit promotional expense, credit COGS.  There's nothing wrong with leaving the expense as COGS unless you specifically want to track the product giveaways in a separate account.