Refunded payment from Vender

Hi there, caralynnae123!

I can help you on the technical side, like guiding you through recording your transactions in QuickBooks, but I can't provide advice about categorizing them. An accounting professional is the best resource regarding accounting questions.

You can temporarily create an expense category and name it as "Ask my accountant", which you can use in recording the charges. Then, create a bank deposit with the same category (Ask my accountant) for the refund. You can change the categories of the transactions later on based on the accountant's advice. Add a memo to the transactions, so you can easily recognize them in the future.

Create an expense category (Ask my accountant):

1. Click the Gear icon and choose Chart of accounts.
2. Click New.
3. Select the Expenses type at the top.
4. In the Save account under field, choose Expenses.
5. In the Tax form section field, choose Other Business Expenses.
6. In the Account Name field, enter something like Ask my accountant.
7. Click Save.

On the other hand, you can also check about reconciling an account in QuickBooks Online for your future reference.

You can always go back to this thread if you need more help with recording your transactions. Take care and have a good one!

Hi Jess, 

That's a fine solution for the refund, however I have no clue where to put the mistaken charge. Our first thought is to put it into our Inventory account, but that's an assets account which doesn't allow refunds, so that won't work. Any suggestions on where to put the original charge?