I have returned an Inventory Part to the Vendor. I want to record the credit from my bank statement AND reflect the inventory adjustment

Welcome to the Community, @elpaso2020.

Let me guide you through the process of recording a vendor refund when it was sent as a credit card credit. Here's how:

1. Go to the Banking menu, then choose Enter Credit Card Charges.
2. Select the credit card account from the Credit Card dropdown.
3. Click the Refund/Credit radio button.
4. Pick the appropriate Vendor name and enter the Date, Ref No, and Amount.
5. Input an appropriate memo to describe the transaction.
6. If you returned items, choose the Item tab and enter the Items and Amounts from the refund.
7. If the refund does not have items, select the Expenses tab, then the appropriate Accounts and enter the Amount.
8. Hit Save & Close.

For more detailed information, you can visit this article: Record a vendor refund in QuickBooks Desktop.

Just in case you need guidance in refunding a customer, check out this article: Void or refund customer payments in QuickBooks Desktop.

Let me know if you require further assistance with recording a vendor refund when it was sent as a credit card credit. I'm always here to help.

That's not going to work because

1. that solution credits an expense account, and like I said, that's a no-no

If I try your 2nd solution, choosing a different account, then the inventory will be incorrect.

Hi Elpaso,

Thank you for posting here in the Community. Allow me to chime in and help you enter a credit card credit from a vendor in QuickBooks Online.

We've compiled steps for recording refunds you received from a vendor depending on your situation. The info provided by my colleague above is the process for creating a refund a vendor sends as a credit card credit.

Since it doesn't work, your alternative option is to create a journal entry transaction. You can debit and credit accounts manually to move the amounts correctly. Reach out to an accountant for further guidance with the accounts.

QuickBooks Desktop offers a wide variety of ready-made vendor reports that tell you where your company stands in terms of expenses and accounts payable. I've attached an article you can check out to learn how to customize based on your business needs: Customize vendor reports.

Feel free to hit that Reply button if you have additional questions about recording a returned inventory. We'll be around to help. Have a great day ahead.  

@elpaso2020 

"However, while it resulted in a correct inventory of that item, it has recorded the credit to the expense account associated with the purchase."

Something's amiss in your description.  If this is an inventory part, then there should not have been an expense recorded when you purchased it because, when you purchase inventory items, they are put into your inventory asset account (debit) so you cannot also have an expense (also a debit).  

Based, on your original post, you want to show a decrease in inventory (credit) as well as a decrease (debit) to your credit card liability.  The proper way to do that is to record a credit card credit as described by @jeanbiverly_ .  That will post a debit (decrease) to your credit card liability and a credit (decrease) to your inventory asset account.  The only way that doesn't happen is if you have an expense account listed under 'Asset Account' in the item set up.  Then, it would post a debit (increase) to your credit card liability and a credit (decrease) to the expense account.  But, you can't have a decrease to your inventory (credit) and an increase in your expense (debit) unless you're using a journal entry or some other odd entry so, again, something sounds amiss to me.   

I'm sending a screenshot of how we have our inventory items entered ... the cost goes under "cost of good sold" account; The inventory information it is recorded under our Asset Account.

@elpaso2020 

"The inventory information it is recorded under our Asset Account."

Then this should be able to be fixed by creating a credit card credit and selecting the inventory item on the Items tab as posted previously.  That will decrease your 1450 - Book Store asset account and decrease your credit card balance.  If that isn't working properly, then you need to post a screenshot of the Transaction Journal for the transaction.  Go to the credit card refund/credit and click on the 'Reports' tab, then click on 'Transaction Journal'.  That will show you the two accounts that were hit.