From time to time (and usually long after the PO was received and closed), the wholesaler will cut her a check, which represents the devaluation of some of the items she had purchased in the past. There is no detail regarding the specific items that were devalued. So I am sitting here with these checks, without a good understanding of how to process them. I feel I need to reduce my inventory value somehow, but without the specific items that the refund applies to, I'm uncertain as to how to accomplish it. I'm also uncertain of how this would impact her P&L. Would the reduction in inventory flow through the COGS account, and show as an expense credit on the P&L? Any help or advice would be greatly appreciated.
I agree with your theory of reducing the item value, but
1. there is no way to do that in QBO, even if you could
2. if the item was sold, there is no value to reduce
3. you do not know the items being revalued
deposit the checks and use other income, or create an income account called vendor refunds, and use that account as the source account for the deposit.