Should I have used a JE to book a refund? Charged 1005 instead of 135. refunded the 1005 and charged 135. Did a journal entry hitting AR and bank. Should I have waited?

Hello, Wibill,

I'll help you book the refund, payment and the withdrawal of $203 in QuickBooks Online. 

Ideally, refunds are booked through refund receipts. Using a JE might complicate the reporting and can cause issues on inventory or sales reports. You'll want to delete the journal entry, then process a refund receipt for $1005. 

To delete a journal entry, simply open it then click the More menu at the bottom. Then, select Delete. 

Next, create a refund receipt: 

1. Click the + New button, then select Refund receipt.
2. Enter the details of the refund. 
3. Click Save and close. 

Then, let's book the $135 charge in QuickBooks. You'll simply want to record it as invoice payment. 

I'm curious what the $203 withdrawal is for. What's the breakdown of this amount? Is it for the total fees for Merchant Services? More details would definitely help me come up with the steps to assist you in booking this transaction.

In the meantime, you'll want to wait for the refund to hit your bank before reconciling. This gives you a guide and a reference when you're about to reconcile it. You can check this article if you need help with the reconciliation: Reconcile an account in QuickBooks Online. 

Ready to work on other areas in QuickBooks Online? Our articles contain guides to help you manage your income, expenses, lists and more. Check them out in the articles list page. 

I'd be more than happy to help you work on other QuickBooks Online Processes. I'll also assist you in managing your Merchant Services transactions. Just say the word below and I'll get back to you as soon as possible. 

Thanks for the great info jamespaul. According to merchant services, the $203 is the net between the refund of $1,005 and other credit card payments I received from multiple customers.  Apparently some combination of payments I took by credit card totaled $802 so they took that plus an additional $203 to make up the $1,005 refund. The customer accounts were paid via the "Receive Payment" option within invoicing.  So those accounts are showing as paid but the payment which paid them isn't going to get deposited since merchant services took them. 

Thanks for the additional details, @Wibill.

In QuickBooks, we’re unable to create a negative deposit to settle the amounts. What we can do is to create a Clearing account and deposit all payments worth $802. Then create a Refund receipt using the Clearing account as the bank account. 

Just follow these instructions:

1. Go to the Accounting menu, then select Chart of Accounts.
2. Click New.
3. Select the Account Type. You may choose any detail type you want for your clearing account.
4. Enter Clearing account in the Name field.
5. Make sure you do not type in any amount on the balance field before clicking Save and Close.

Once done, create a bank deposit and allocate the payments to that Clearing account. You can use this reference to record them.

Then proceed to create a Refund receipt. By this, the balance shall be -$203. So when $203 posted in your bank account, you can add this to the Clearing account to zero out the balance. 

I’ve also added an article to reconcile accounts in QuickBooks. It helps you manage transactions to make sure everything matches and accurate. 

Don't hesitate to leave a comment if you have additional questions or concerns. We’re always here to help you out. Take good care!

Thanks for the detailed answer @MadelynC .  I have finally fixed everything. I appreciate the help!