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tlenzmeier
Level 4

Refunds Showing In COGS

Hello,

 

Something odd is happening. I have recorded sales for an event and posted the deposit. Now I've had to issue a handful of refunds. When I go to write the refund check and when I assign it to the item I created for the event, the refund is applied against a COG account rather than the revenue account associated with the event. I've checked and rechecked the item and it is assigned to a revenue account. Previously, when I have done this you see the refund as debit to revenue, NOT a debit to COGS.

 

I can't figure out what's going on.

Thanks in advance!

6 Comments 6
ZackE
Moderator

Refunds Showing In COGS

tThanks for getting in touch with the Community, tlenzmeier. I appreciate your detailed information.

 

To properly identify why refunds are showing as debits to COGS, I'd recommend working with an accounting professional. If you're in need of one, there's an awesome tool on our website called Find a ProAdvisor. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.

 

Here's how it works:
 

  1. Go to our Find a ProAdvisor page.
  2. Use the City or ZIP search field to specify a location.
  3. Select Find a ProAdvisor.
  4. Browse through your results and find one that works best for the business. You can click on each ProAdvisor's profile to learn more information about them.

 

Once you've found an accountant, they can be contacted through their Send a message form.

 

I've also included a detailed resource about working with COGS which may come in handy moving forward: Understand inventory assets & cost of goods sold tracking

 

Please feel welcome to send a reply if there's any additional questions. Have a wonderful Tuesday!

tlenzmeier
Level 4

Refunds Showing In COGS

You have got to be kidding! You want me to pay someone to fix your problem? When I issue a refund by writing a check and record it using the Item tab, the debit is to the revenue account and the credit is to the bank account. Then why on earth does the report show it in COGS! That's wrong.

IrishA
QuickBooks Team

Refunds Showing In COGS

I appreciate you reaching out in the Community, tlenzmeier. Accurately recording transactions is crucial for maintaining precise information, which is our top priority. Let me provide some insights about the report showing COGS to assist you further. 

 

The way your transactions are reported in QuickBooks depends on how they were initially set up in the program. Given that the item assigned on the refund check is recorded against the COGS account, I recommend revisiting this item. It is important to ensure that the income account chosen is the revenue account. This ensures that your transactions are properly posted to the appropriate account.

 

Here's how:

 

  1. Select Lists.
  2. Choose Items.
  3. Double-click the item you want to check.
  4. Review the info for the item, confirm that the item is categorized under the selected Income or Revenue account.

 

You can check this article if you need guidance modifying or making changes on the item: Add, edit, and delete items in QuickBooks Desktop.

 

If the item is accurately recorded in the appropriate income account, we can run the Verify and Rebuild Data tools in QuickBooks. This will help check for any data issues in your company file and fix them by rebuilding your data.

 

If the issue persists, I highly recommend contacting our Live Support Team for further assistance. They are equipped with specialized tools that enable them to offer comprehensive support through screen-sharing. This interactive method allows them to conduct a thorough investigation of any ongoing issues in your account.

 

Moreover, did you know that you can add electronic signature to your future checks, please refer to this article: Create and use electronic signature for checks and paychecks.

 

Maintaining precise transaction records in QuickBooks is crucial for optimizing your business performance, tlenzmeier. If you need further assistance, just please click on Reply and we are ready to assist you always.

tlenzmeier
Level 4

Refunds Showing In COGS

The item in question is an INCOME account. I've already said this. The report isn't working correctly. A check written and applied against the income item should offset the income item: a debit to INCOME. A credit to the bank account. How many times do I have to say this!

Shania_C
QuickBooks Team

Refunds Showing In COGS

I recognize your frustration and acknowledge your concerns. When a check is written and applied to an income item, it should result in a debit to the income account and a credit to the bank account. I would be happy to provide more details about the incorrect report appearing in COGS, @tlenzmeier.

 

Since you've already verified that the item is correctly recorded in the correct account. I suggest performing a Verify and rebuild data in QuickBooks Desktop for Mac, this will check the common data issues in a company file and fix them. Here’s how:

 

Verify Your Company File Data

Before proceeding with the rebuild of your company file, it’s essential to use the verify tool in QuickBooks Desktop for Mac to check your company file for any errors or data corruption.

 

First is to navigate to File and then choose Utilities. Click on Verify Data, then press OK to close all open windows. If the message “Your data has failed the integrity check” appears, you will need to rebuild your file. If no issues are detected, your data verification is complete.

 

Rebuild Your Company File Data

After verifying and confirming errors or data damage, follow these steps to rebuild your company file:

 

  1. Go to File, then select Utilities.

  2. Choose Rebuild Data, then click OK to close all windows.

  3. QuickBooks will prompt you to back up your file before the rebuild. Click OK to proceed with the backup or select Cancel if you wish to continue without backing up.
    * If no backup preferences are set, QuickBooks will suggest that you set them. Click on Backup Preferences, make any necessary changes, and then select OK.
    * Once the backup is complete, choose Show in Finder to locate the backup file, or just click OK if you’ve finished.

  4. After the rebuilding process is done, click OK.

To ensure your file is completely error-free, verify your company file once more after the rebuild. Should any errors or damage still be present, consider rebuilding the file again.

 

For more detailed information, you can scan this article: Verify and rebuild data in QuickBooks Desktop for Mac.

 

However, if you've completed the suggested troubleshooting process, if the problem continues to persist, I advise reaching out to our Technical Support Team for additional assistance. They can conduct a more comprehensive investigation into the issue. Please reference the information provided in the attached article for various ways to get in touch with them.

 

Additionally, you can find their direct phone number, the hours during which they are available, and their support schedule at the bottom of the page, enabling you to contact them when it is most convenient for you. Get help with QuickBooks products and services.

 

You may check out this article to learn how to balance your checkbook and ensure they aligns with your actual bank and credit card statements: Reconcile accounts in QuickBooks for Mac.

 

Feel free to reach out if you have any further questions or concerns regarding transaction reports in QuickBooks Desktop for Mac. Just leave a comment below, and I'll be more than happy to assist you with the information you need. Take care and have a great day!

Rainflurry
Level 14

Refunds Showing In COGS

@tlenzmeier 

 

As you can tell, QB "employees" won't be of much help.

 

When you issued the refunds, did you just write a check or did you go to Refunds & Credits and write the check from there?  Also, what kind of item is this (inventory, non-inventory, other charge, etc.)?  Inventory items refunded will debit Inventory and credit COGS because the item has to be put back into inventory and your COGS needs to be reduced based on the original sale.  Where are you seeing that the refund is hitting COGS?  The Transaction Journal report?  Is it increasing or decreasing COGS?      

 

  

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