Hello there, @JudyBee.
When making a deposit ensure that the account your using is the account payable to show it in your bank. you'll need to record the bill credit for your refund amount, then link it to deposit to the Bill Credit.
- Go to the Vendors menu, choose Enter Bills.
- Click the Credit radio button to account for the VAT.
- Enter the Vendor name, then select the Expenses tab and enter the Accounts on the original bill.
- In the Amount column, enter the appropriate amount for each Account (the amounts may have to be prorated).
- Hit Save and Close.
Once done, link the deposit to the Bill Credit:
- Go to the Vendors menu, Click Pay Bills.
- Check the deposit that matches the vendor check amount.
- Select Set Credits and apply the Bill Credit you created earlier then select Done.
- Click the Pay Selected Bills, then select Done.
I'm always around if there's anything that I can help!