 QuickBooks Online, refund receipt form. Get ready to start moving on up with QuickBooks Online. We're gonna be using the free QuickBooks Online test drive searching in our search engine for QuickBooks Online test drive picking the option that has the Intuit.com and the URL Intuit being the owner of QuickBooks. We're selecting the United States version of the software and verifying that we're not a robot. Holding down control, zooming in a bit up on the scroll wheel currently at 125% on the zoom in. Remembering that in the cog dropdown we could be using the business or the accountant view. We're using at this time the accountant view. We'll try to toggle back and forth between the two possibly at the end so you can see where the locations are under the two views. We're gonna go up top and duplicate some tabs as we do every time to put reports in. Right-clicking the tab up top to duplicate it. Right-clicking the duplicated tab to duplicate it again. As that one's thinking tab to the left reports on the bottom and opening up our favorite balance sheet as that is thinking we're gonna go to the tab to the right reports on the left and open up the PNL profit and loss or income statement. Gonna close up the tab up top or the hamburger or the hamburger as I call it sometimes we'll change the range and we'll do that by going 010122 January 1st, 2022 tab, 123122 December 31st, 2022 tab, run it, update it, refresh it whatever you wanna call it. Then we're gonna go to the tab to the left and close the hamburger again scrolling up to the top changing the ranging. So it's gonna go from 010122 tab, 123122 tab just January through December, 2022 and run it, update it. Then tab to the left. That's the setup process that we do every time. Support accounting instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course. Each course then organized in a logical, reasonable fashion making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files and more like QuickBooks backup files when applicable. So once again, click the link below for a free month membership to our website and all the content on it. Now we'll hit the plus button. We've been looking at the customer area where at the end of the day we expect money to be coming into our checking account for goods and services that we provided to customers. The easiest, our kind of system that we might have would be one where we have gig work we're getting paid by YouTube or some kind of platform, Amazon or something we wait till it clears the bank and then we record revenue with a deposit form possibly with the use of the bank feeds. The second easiest format would be add a check register, cashed based system but not so easy that we could just wait till something clears the bank. We've record the sale at the point in time we make it at the cash register possibly with the sales receipt form and then we make the deposit there so it's another step in the process. And then if we're in the kind of industry where we have to do the work first and then invoice the client we then do the work, invoice the client then we have to track and get the receipt of the payment from the clients and make then the deposit. Now what happens if there's a problem in this cycle and the customer wants their money back? That's where we have the credit memo that we talked about last time and this time we're gonna be looking at a similar concept with the sales receipt. Let's look at this in terms of a flow chart to get a better idea this is the desktop version flow chart but it's just a flow chart we're just looking at the flow here. So if we had a full invoice then receive payment and then record the deposit type of system and a cruel system. If we make the invoice it increases the accounts receivable. If the customer comes back and wants to return the inventory or reverse the transaction before they have paid us and they're like, do it or else I'm gonna give you a bad like Yelp review or internet review or something and we're like, okay, okay then we can issue a credit memo basically right here which would reverse the accounts receivable and everything else before we got paid. That's what we looked at last time. But if we made the invoice received the payment and made the deposit or if we made a sale at a cash register for example and already made the deposit then and then they come back and say, hey, I want my money back. Well now if we say, okay don't give me a bad Yelp we'll pay you your money back you would think that maybe you could just issue a check and you kind of could you can say I'm gonna give you a check to basically give the money back but you also have the inventory that could be involved and so on and we'd also like to track the information in the customer center. So that's what we're basically looking at here. So instead of having a credit memo in that situation we're looking at the refund receipt transaction. So we're actually gonna basically give the refund and we should instead of just writing a check or having an expense form because we will be decreasing the checking account we wanna use the refund receipt form and that will basically track it better in the customer center and possibly reverse the inventory and so on if we need to so that we could see what happened in the future and if we deal with this business again we gotta say, do we wanna do business with them or whatever or that they're the one that's threatened us with a Yelp review. So maybe we try to keep our distance. Any case, so let's go through the process let's make an invoice and then we'll receive the payment we'll show you the whole process. So I'll make an invoice and then we're gonna start here so that we can reverse this. And so we'll say, this is AAA which is starting the same process. I'll go through this quickly because we've seen this before and I'm gonna make it with inventory so we can make it the more complex type of transaction if it was just a service item then you can just delete some of the complexity with inventory in your mind and we're gonna say inventory item. I'm gonna say inventory one as the item name and quantity on hand. I'm gonna put 10 on hand and we'll say that as at the beginning of this month zero is the reorder point for it's gonna be the inventory asset account when we purchase them it will go up when we sell from with an invoice it will go down. That's what we're doing now. Description inventory one sales price I'm gonna just say as a thousand dollars it's gonna go to sale of product income we'll say it is taxable to make it more complicated and then we're gonna say the purchase then let's say we purchase it for that 750 again cost of goods sold is the expense account when we sell it which we're doing here with the invoice. So we're gonna make the invoice so we can then reverse it and so we'll make the invoice and there it is what's this gonna do it's an invoice accounts receivables gonna go up by the full amount 1080 other side is sales going up by 1000 we also have the $80 increasing the accounts payable on the balance sheet not accounts payable but sales tax payable we also have inventory going down by I think we said 750 driven by the item cost of goods sold going up by 750 the sub ledger for AAA customer will also be tracking that they owe us a thousand dollars the sub ledger for inventory will track the item or decreasing it by one item as well as the dollar amount. So let's record it and check it out real quick we're gonna say let's save and close we'll go then to the balance sheet and just check it out I'm gonna say run the report and let's go into the accounts receivable and I scroll down to the bottom and so there it is there's the full amount 1080 I won't drill down anymore because we've seen this before I'm gonna go back to the balance sheet then to the tab to the right the income statement I'm gonna refresh it the income has going up this time or it should have for whether we could sell a product income and I'm gonna say that one there it is it went up for the 1000 the difference of $80 I'm gonna go back to the income statement is back on the balance sheet the $80 difference is in a liability account so I'm in the liabilities this board of equalization that's where the $80 went sales tax liability in essence and then scrolling back up we also note that inventory went down so inventory is an asset account we're on a perpetual inventory system so it's up top in the inventory it went down by the 750 scrolling back up and on the income statement we know that the cost of goods sold was impacted as well cost of goods sold going into it there's the 750 let's go back again let's go back to the balance sheet and just note that the sub ledger for accounts receivable is also impacted so if I go to the tab to the right right click on it duplicate it and then we're gonna go then to the reports on the left and it's important to notice all these connections because when we reverse the transaction we wanna see what the implications are and why we might use one form or another so I know this is kind of tedious but we're gonna go down here and go to who owes you we're gonna go to the customer balance detail report and then there's the AAA the total of this report broken out by customer 636152 ties out to the what's on the balance sheet which is the 636152 and the inventory will tie out so if I go to the tab to the right right click on it duplicate it we're going to go to the reports on the left hand side and we wanna look at the inventory report now so we're gonna go into I'll just type up top inventory valuation summary close up the hamburger there's the inventory we put 10 on hand and then we sold one so there's the units of inventory we have and the total cost 734625 also matches what's on the balance sheet 734625 okay now let's say that we actually collected on it so they're gonna they're gonna pay us so if I go back to the first tab we can go into the sales area on the left we can find the open invoices under the sales for example we can find them here by saying where's the open invoices there it is next step receive payment we can also find them in the invoices tab and look for the open invoices and I'm gonna sort them by date so I can see there it is I can say receive payment or I can go into the customer and say the customer actually paid us so we got AAA receive payment so I'm gonna record the receive payment so notice if they didn't give us a receive payment and they came and said hey I want to reverse the transaction now or else I'm gonna give you a bad Yelp review and everybody and it'll be horrible you'll have like a one star on your Yelp review and we're like no we could then issue a credit memo at that point and that would reverse it but if they already paid us let's do that I'm gonna say they already paid us so we're saying that everything's going well here AAA let's imagine they paid us and we're just gonna say cash it's gonna go into undeposited funds cause that's the normal process or we could have put it directly into the checking account right now we talked about that before but in essence the receive payment is gonna increase some kind of cash account I'll do undeposited funds and then it's gonna reverse the accounts receivable so I'm gonna say okay save and close let's check that out go to the balance sheet we're gonna run it we've got undeposited funds which should have going up by the 1080 there it is the other side decreases the accounts receivable the accounts receivable goes down going into that and scrolling back down there it is increases and decreases to the AR the sub ledger for accounts receivable will also be updated so if I scroll back up top and run this or refresh it there's no more AAA the total down here is at 528152 which should tie it to what's on the balance sheet then let's just make the deposit to finish this so I'm gonna deposit it from undeposited funds into the checking account plus button we're gonna say make the deposit and it's gonna go into the checking account I'm just gonna pick the AAA the 1080 increasing the checking account so I'm just gonna save that just to finish the cycle and then if I go back to the balance sheet now undeposited funds went back down that's not the balance sheet there's the balance sheet I'll refresh it and now in the checking account we've got the 1080 so we already got the money so now if I go back on over and the customer comes in and says hey we're gonna go back to the first tab I wanna return this thing I want or else I'm gonna you're gonna get we're gonna yell at you gonna tweet at you or something but don't tweet at us for crying out loud we're gonna go into the AAA and say but they've already so we can't reverse it because they already paid us we're like we'll give you your money back if you just don't give us a bad tweet and so then you would think you could do that and say we'll give you a money back with a check form or an expense form and you could but we would like to reverse everything directly so instead of ensuring the credit memo we're gonna stay in the customer fields over here and say it's gonna be a refund receipt now because we're gonna give them the money back so it's gonna be an AAA we'll say and so and now I'm just gonna construct this one just like the invoice so I'm just gonna re-input the invoice let's make it as of 010123 so it'll be in its own area and then the payment method so I'll just keep it cash and then the refund from typically it's gonna come out of the checking account rent so in essence this will be kind of like a check form and if it was an actual check then we would have a check number if it's not a check then if it was an electronic transfer or something then maybe we don't have a check number so this would be kind of like the check form versus the expense form so we can use in essence the same form here the check form and the expense form they get anyways then we can go down here and say we've got the inventory item so we're just gonna do the same type of thing and there we have it so what's this gonna do well it's a refund receipt so we're actually gonna be it's kind of like a check form it's gonna be decreasing the checking account and then the other side it's gonna be for the full amount the 1080 the other side is gonna go to the other side is gonna go to reversing you know in essence the inventory the invoice transaction the best way to think about that might be to actually create the invoice so I'll just we did this last time in the credit memo so I won't I'll do it slow like not as fast or not as so we got the accounts receivable goes up with the invoice the sales went up with the invoice the sales tax payable went up with the invoice cost of goods sold went up and inventory went down so we're not doing a credit memo but we're doing in essence the same thing except we're returning the money now so if I think about what happened from a journal entry standpoint I'm not gonna reverse the accounts receivable because we've already received the payment like the next thing that happened journal entry number two was that we got cash of the full amount of the 1080 and then we've got and then we've got a decrease to the accounts receivable of the 1080 in essence so you could if I was to continue this kind of if I was to reverse everything I could say I would reverse AR I would reverse the sales reverse the sales tax and then you could say that you're reversing the cash and the accounts receivable and so this is gonna be a credit and this is gonna be a debit right but but these two have already been so you're not gonna do this again you're just basically gonna say well I'm just gonna reverse the cash so the cash is gonna go down when I issue this form instead of the accounts receivable because I've recorded it here already and therefore it's the same reversal of the invoice except that the invoice has already been cashed therefore instead of reversing AR I'm in essence just reversing cash and I'm not gonna do this down here right and then I've got the cash and then the sales is gonna be reversed sales tax and then if I get the inventory back inventory would go up and the cost of goods sold would go down now I have the same issue we had with the credit memo is that the sales is gonna be reversed and maybe I don't like that maybe I would rather have it go to bad debt or sales returns and allowances so we'll do the same thing we'll record it this way and then we'll talk about that change that little twist so if I reverse this it's gonna reverse exactly what we had on the invoice so I'll save it and close it we'll just check it out save and close so there it is and I'm gonna say okay so now we have this payment having been issued and now I'm in AAA right here and I can see that information so if they come back in and ask me about it or something or if someone else asks me about it then I can see the detail in here with a nice payment kind of form so if my boss comes in and says what happened with this lady that threatened to give us a Yelp review well I gave her a refund and I can see it in the activity on the AAA customer here so that's why it's kind of nice whereas a check form might not be as designed to kind of fit in here and it reverses nicely the transaction kind of automatically by reversing it due to the format of it so even though it's still kind of like a check form alright let's go to the balance sheet and just take a look at what happened so it should have reversed the checking account so if I go into the checking account I've got to make this the next year so let's make this 23 to 23 and then run it and then I'm gonna go into the checking account and so there's the reversal there's reversed it like we would expect if I bring this back on the detail to the prior year and run it you can see that there's the deposit we made the deposit and then we reversed it with basically a check form so it's a refund form which in essence is basically like a check form it's gonna be decreasing the checking account but it has a specific purpose to it so if I go back into it boom and then I'm gonna close this back out I'm gonna scroll up and go back here and then the other side is on the profit and loss let's go into there and then run this one so let's change the dates up top to make it to 23 and 12, 31, 2, 3 and run it and then sales got reversed by the full 1000 here so if I span that across the two time frames from 22 to 23 we reversed it that would make sense we're gonna go back up and then say okay the sales tax if I go back to the first tab is the liability scrolling down to the liabilities we've got the board of equalization let's go into that and there's the sales tax got reversed if I go back to the prior period 2022 run it then we've got the sales tax reversed out and then scrolling back up and the inventory so if I go up to the asset of inventory it should get reversed so there it is there's the inventory if I go back to the prior year let's see the two transactions together side by side it got reversed and then finally the cost of goods sold on the income statement got reversed so we're gonna say cost of goods sold there it is and if I go to the prior period here to see the two transactions side by side you see them side by side scrolling back and then also if I go to the balance sheet the inventory sub ledger is gonna be updated for inventory in units so that's the accounts receivable isn't impacted because because it already got paid we were issuing right so we're gonna go back but the sub ledger for inventory if I run it for the next to 123123 and then run it now the inventory went back up to 10 units and I'm currently at 809625 which should tie out to the balance sheet of the inventory which it does so that looks good now the issue here just like with the credit memo is that now you've got a decrease to the sales account maybe I don't wanna do that maybe I would rather record it to bad debt or sales returns and allowances I'm just gonna assume it's gonna go to sales returns and allowances this time so let's just reverse it to there so I'm just gonna tweak it a little bit I'm gonna go back into my now I'm in my customer AAA and let's say that on the refund I'm gonna tweak it a little bit and say that I don't wanna reverse sales so I'm gonna make another item down here which will be going to sales returns and allowances I'm gonna make another item I'm gonna say new item I'm not gonna make it inventory you might be able to make it non-inventory I'm just gonna call it a service item and I'm gonna call it sales returns and copy that and put that in the description I'm not gonna put a price because I will I will just type in the price and then I'm gonna say that this is gonna be another account a new account which is gonna be an income account but it will be a contra income account with a negative number in it sales of products other primary income let's call it sales returns and allowances boom save it it's gonna have tax involved in it so that looks good saving it and closing it then I'm just gonna put the amount down here and then delete the amount up top so we end up with the same dollar amount down here because the taxes applied because it was taxed so we're still going to have the refund receipt is gonna be making in essence a check decreasing the checking account for the full amount a 1,080 the other side instead of reversing sales directly will be driven by this item now creating a new account sales returns and allowances so we don't decrease the sales account we could have made it to bad debt which would be an expense account same concept if you needed to do something like that and then the sales tax is still being implemented the same way it normally would so we're reversing the sales tax payable and inventory is still impacted because of this first line although there's nothing in it the item is still gonna drive the inventory component which was a usually in an invoice it decreases the inventory and increases cost of goods sold so by the 750 I think we said it was so here it's gonna put the inventory back on the books increasing it by 750 and decreasing cost of goods sold now if we didn't get the inventory back and we're just like then maybe then you don't you could just delete this one you don't record it at all right but if we're getting the inventory and we need to reverse that there we have it so let's save it and close it and I won't go through the whole thing again but we should have this everything should be the same in essence if we did everything properly which I believe we did but I don't wanna get too tedious by going through the whole thing again the point is on the income statement that now instead of it making a negative income or lowering income because we usually like income just to go up then it's now going to the sales returns and allowances account so we have a contra account so if we had income it would be the income minus you know the sales returns and allowances so that's the general idea the general idea just to recap if you have an invoice and then you're getting you're gonna reverse it before you get paid credit memo but if you already got paid either through an invoice or the sale that happened at a cash register then you gotta give them the money back which you would think would be a check form but you might want to instead of issuing the check form use the refund receipt I hope I've been using the right term and not the sale the refund receipt form because that's gonna help you to reverse it deal with inventory and make it a little bit easier to see hopefully possibly in the customer section because it's a customer type form within the customer detail so we can explain it to ourselves or supervisors and think about how we wanna do with that client going forward in the future okay let's go ahead and just go to the cog up top and switch to the business view and just to show you some of these areas we've been going to under the other view so we've been looking if I go to the get things done that's the home page and then we opened up the reports and the business overview and the reports area that's where we went to the balance sheet income statement and the inventory reports and the customer reports and then in the get paid and pay area that's where we manage the customer information so we got the customers there's AAA under the get paid we've got the invoices so we can see those open invoices when we entered the invoices and then if we wanna track all the transactions on the sales side of things we can go to the bookkeeping area transactions, close in the hamburger, sales and this is where we've got basically all the sales transactions where we can sort by the open invoices for example or we have the capacity to use the other kind of we have the other types of forms as well that we can sort by here so there that is