Use the General Journal to Enter a Cash Refund on a Credit Card Transaction in QuickBooks

Many companies deal with returns and refunds, and for reasons you’ll need to change your QuickBooks accounts for a refund. As a result, knowing how to reverse a transaction in the ledger will assist you in maintaining accurate reporting and avoiding publishing incorrect sales figures. Instead of simply reversing the sale in the ledger, it is required to post a journal entry if you refund a customer in cash after she/he pays with a credit card. In this article, you’ll learn a detailed process to use the General Journal to Enter a Cash Refund on a Credit Card Transaction in QuickBooks.

Why do you need to Enter a Cash Refund on a Credit Card Transaction in QuickBooks

You will need to return something you bought with your credit card because it was broken or you didn’t need it. Typically, the vendor will process your refund using the same credit card that you used to make the order. This refund will appear as a credit card balance reduction on your credit card statement. This refund must be entered in order for your QuickBooks credit card balance to be accurate.

Steps to Enter a Cash Refund on a Credit Card Transaction in QuickBooks

Below are the steps to perform the process to use the general journal in order to enter a cash refund on a credit card transaction in QuickBooks:

• First, go to the QuickBooks Company menu and locate then click on the General Journal Entry
• Next, set the date for the refund to be given. Assign a number to each entry
• Make a debit to the cash account for the refund sum
• The debt lowers the cash account balance, indicating that you gave the customer cash
• The same amount should be credited to the “Sales” account
• To account for the return, the revenue balance is reduced
• If applicable, debit the cash account for the balance of any sales tax
• To balance the ledger, credit the “Taxes Payable” ledger account with the same number
• Lastly, save the paperwork to endorse the refund for audit purposes after you’ve posted the entry.

Steps can be Performed When you Enter a Credit Card Refund in QuickBooks

There are mainly 4 steps need to carry out to enter a credit card refund in QuickBooks:

• Click New (+) button at the top of the left menu bar
• Next, select the Credit Card Credit within the Vendors column
• Now, enter the information related to the credit transaction
• At last, you have to hit the “Save and Close” option.

Let’s take a closer look at how to enter credit card credits in QuickBooks.

1. Navigate to the Credit Card Credit Screen

At the top of the left menu bar, click New button from the QuickBooks Online dashboard Next, select the Credit Card Credit within the second column under Vendors.

2. Enter the Transaction Information

The Credit Card Credit screen is very similar to the Expense screen, which you use to manually enter credit card transactions:

• Payee: Choose the vendor who is issuing you a credit on your credit card.
• Bank/Credit Account: Select the credit card account on which the credit will be applied.
• Payment Date: Not the date of the initial bill, but the date the credit was given.
• Category Details: Determine which category should be decreased by the credit by looking at the original credit card expense entry.
• Item Details: Use the same things that were on your credit card bill. If you’re getting a credit because you’re returning inventory, make sure to put the amount of things you’re returning in the QTY field so that your inventory units are reduced.

Click the green Save and close button in the bottom-right corner of the screen once you’ve entered the credit details so that it reverses the required portions of the original expense.

This article ends here! Hopefully, the above information is helpful for you to make your process easy to use the General Journal to Enter a Cash Refund on a Credit Card Transaction in QuickBooks. It can take a little bit of time and effort, but maintaining accurate reports and avoiding issuing incorrect sales figures, it is important to perform this process.

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