Bounced check showing up as a credit on customers account

Hi there, OPM96.

It's good to have you here in the Community. It'll be my pleasure to help you correct this bounced check issue.

Generally, bounced checks aren't supposed to show up as a credit on your customer's account. This is because QuickBooks will create a journal entry which credits your bank account and debits the Accounts Receivable (A/R) account. After this, the payment is removed from the invoice, which will be reopened.

However, since it is showing as a credit, we can go ahead and delete it to correct the wrong amount. Just a heads up, make sure that you've recorded the payment your client has taken care of before doing the steps below.

To delete the bounced check:

1. From the Customers menu, choose Customer Center.
2. Select the customer's name.
3. Go to the Transactions tab.
4. Click the Show drop-down menu located on top of the Type column, then select Received Payments.
5. Double click the payment that you recorded as a bounced check.
6. From the Edit menu, select Delete Payment.
7. Hit Yes.

To delete the General Journal Entry:

1. From the Customers menu, choose Customer Center.
2. Select the customer's name.
3. Go to the Transactions tab.
4. From the Show drop-down menu, choose All Transactions.
5. Double click the General Journal.
6. From the Edit menu, select Delete General Journal.
7. Click Yes.

As mentioned, this transaction shouldn't show up as credit, so I'm going to include our guide on how to record bounced checks if you want to record it again.

Let me know here if there's anything else I can do to help you with. Thanks for dropping in, wishing you and your business continued success.

My solution was to apply the original bounced check to the journal entry. I am not sure why this is not done automatically by the bounced check button. Unless I am missing something, this seems to work for me. I hesitate to delete the original check and journal entry because I would lose audit trail.

Thanks for joining this thread, @Sambeaux.

Let me share an additional information about the bounced check issue in your QuickBooks Desktop. 

My colleague @AldrinS provided the exact information. To correct the recording transactions and to ensure that your books are accurate, you'll need to delete the bounced checked and the journal entry that was recorded incorrectly by following the steps provided above. 

There's no need for you to worry since all the changes will reflect on your Audit Trail report to ensure that you still have the copy from the originally recorded transactions.

Here's how you can pull up the Audit Trail report:

1. At the top menu bar, select Reports.
2. Go to Accountant & Taxes.
3. Select Audit Trail.

You can also check this article for the detailed steps on how to Customize reports in QuickBooks Desktop. 

To learn more on how to record bounced or NSF checks from customer, you can visit this article: Handle Non-Sufficient Funds (NSF) or bounced check from customers. 

Please know that you're always welcome to post if you have any other concerns about handing bounced check. The Community will always here to help. Wishing you and your business continued success.