@R K 

"Is this when the overage posts to an "unapplied cash payment" account?"

The overage posts to the unapplied cash payment account as of the payment received date on cash basis.

The response provided by @MariaSoledadG is mostly correct but has some important details that were missed IMO.

1) Set up a bank account called Clearing Account in QB.

2) Set up a service item called 'Customer Overpayment' and select the newly-created bank Clearing Account under the income account drop-down menu.

3) Create an invoice (not a journal entry) and select the Customer Overpayment service item for $400.

4) Apply the existing $400 overpayment to the invoice created in step 3.  This clears the existing overpayment.

5) Finally, issue a credit memo (CM) to your customer using the Customer Overpayment service item for $400.  This zeros the balance in the Clearing Account. 

There should be an easier way to do this in QB Online.  In Desktop, when receiving the overpayment, you are asked how you want to handle the overpayment (issue a credit memo, issue a refund...)