I appreciate you for providing the details, dfampound. Creating a journal entry is essential to correct your balance sheet due to the bounced check. Here’s a step-by-step guide on how to create this journal entry.
Here's how:
- Navigate to the Company menu.
- Select Make General Journal Entries.
- Set the date of the journal entry to the date the check was bounced.
- In the journal entry:
- Credit the Accounts Receivable account with the amount of the bounced check to decrease your A/R (this part removes the down payment from A/R since the payment didn't materialize).
- Debit the appropriate income account (where the revenue was originally recognized) with the same amount to decrease it as well. This step removes the revenue recorded by the initial sales receipt.
- Add a memo to the journal entry describing the purpose: Example: To reverse bounced check for sales receipt #1234.
- Select Save & close to record the journal entry.
After saving the entry, review your Balance Sheet to ensure that the entry corrected the A/R and the income account as intended.
Additionally, to make a journal entry in QuickBooks Desktop, you can refer to this article as your guidelines: Bounced check from Customers.
Moreover, once the customer makes the full payment, you can record it in the Received Payments section of QuickBooks Desktop.
By following these steps correctly, the adjustments will accurately reflect that the down payment was never actually received when you generate cash basis reports. Feel free to leave a comment below by clicking the Reply button. We are always here to help!
