 QuickBooks Desktop 2023. Apply customer deposit credit to invoice. Let's do it within 2-Hits QuickBooks Desktop 2023. 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. Here we are in QuickBooks Desktop. Get great guitars practice file. We started up in a prior presentation going through the setup process. We do every time maximizing the home page in the view drop down. We got the hide icon bar open windows list checked off open windows open on the left reports drop down company and financial P&L profit and loss. We're going to range in changing 0101232 1231 23 customize and fonts to change to 14. Okay, yes. Okay, let's go to the reports drop down again company and financial this time. The balance sheet standard customize it change the range of 101 to 3 to 1231 to 3 font and numbering up to 14 and okay. Yes, and okay. That's the setup process. We've been going through every time in the prior presentation. We imagine the situation. Let's go to the home page to imagine it where we've received a payment before we invoiced someone. So in our scenario, that would be a customer comes in. They say, hey, look, I want this particular guitar and we're like, well, hold on to it until you give us the rest of the money, but we would like an advance at this point in time and you can. So therefore we entered the receive payment before entering the invoice, which is one and a quite easy method to be applying this or work this kind of process out in QuickBooks noting, of course, that normally it goes in the other order. We invoice and then we receive the payment or we receive the payment at the same point in time. We give the inventory, which would be using a create sales receipt in this case. We got money, but we didn't give the inventory or do the work. If we just enter the receive payment that will create in essence a negative receivable for that particular customer, which as we discussed in the prior presentation is not exactly right from a financial statement point of view because what it should do is create a positive liability and unearned revenue account. However, from a logistical point of view on the bookkeeping side of things, it makes a lot of sense to do it this way because the supporting account for the accounts receivable is the customers and the customer center. In other words, if I use this form, then I can go into the customer center quite easily here and say, okay, customer center, Mr. Anderson, I can track the fact that I see that payment and I can make an invoice and apply the payment to the invoice quite clearly. Whereas if I use some method to just record unearned revenue, I don't have that same kind of link to the customer center available for that particular account. That's kind of the idea. We'll take a look at another method in a future presentation to kind of account for that using the unearned revenue. But this method works well and like I say, you can always still then do a period in adjusting entry if we haven't entered the invoice yet. For example, if I go to the reports dropdown and if we go to the customers and receivables, we go to the customer balance detail and then let's change the size here to bring it up to, let's say, let's make it 12, okay, yes and okay. And I look at Mr. Anderson. I'm going to make these a little wider. Then there's the 300. I have a negative 300 here. That shouldn't be the case because that means that I owe them money or the guitar, not that they owe me money. So that's not exactly right. It should be a positive liability. However, after I create the invoice, which we will do this time, it'll wash itself out and everything will be correct at that point. It's just the timing difference in other words. So if I wasn't to receive the invoice yet by the end of the year or the end of the month, then I can do an adjusting entry to properly account the accounts receivable and the under revenue, allowing me to make the bookkeeping as easy as possible as well as do the adjusting entries to report the financial statements as clearly as possible periodically at the end of the month and the end of the year. That's the general idea. So now let's imagine that we're going to get that they they're going to sell the guitar. We're going to finish the transaction. So I'm going to create an invoice and apply this $300 to the invoice. Let's go to the home page. So we did the this step first. Now we're jumping back to creating the invoice and I'm going to type in Mr. Anderson, Mr. Anderson, and this happened. Let's say the 26th, like a day later, Mr. Anderson came in and we're going to say that he wanted an EPS H for two of those and this is an epiphone semi hollow body $400. The tax is applied and we're going to say an ELP. Listen, ELP wants one of those. And so there we have that. So we have the calculation down here. Now we need to apply out the advanced payment. We could do that by going to the apply credits up top. So I will apply the credits. The changes to this transactions must be recorded before continuing. I'm going to say, okay, your company email address is missing. So I'm going to say, okay, let's uncheck the email apply credits. Yes. And then we have the credit to apply. There's the $300. That's what I want to do. So I'm going to say, okay, done. And there's the $300 and that brings the total down to what would be owed after the fact that they already gave us the $300. So this gets a little bit confusing to think about how this is going to be recorded because remember the invoice in and of itself can be a little bit confusing. The data input pretty, pretty easy, pretty easy to get to this bottom line number. But what's going to happen to the financial statements? Well, it's an invoice. So it's going to increase the accounts receivable, but it's going to increase the accounts receivable by this $1,365. This $300 is really just an information kind of component because we already recorded it, right? That's already on there. So really it's going to increase the AR by the $1,365, which will net it out against the $300 that's already in the account from the received payment that we've recorded. And then the other side is going to go to sales for the $800 and the $500. The difference going to sales tax payable of the $65. And then the inventory is going to go down by amounts not on the invoice, but driven by the items. And the cost of goods sold is going to go up for the same amount that net impact on net income will be the increase in the revenue of the $800 and the $500 minus the cost of goods sold, whatever that is driven by these items. And the sub ledger for the customer of accounts receivable will be adjusted for Anderson, which will apply the full $1,365 invoice, which will net out against the $300 payment that already has been received to represent the $1,065 balance still owed to us in accounts receivable for Mr. Anderson. And the inventory sub ledger will be adjusted for the quantities here. So let's save it, close it and check it out. So we'll go to the balance sheet and we can say, okay, the accounts receivable, if I double click on it, there's the amount for the invoice. If I double click on it, notice it represents this amount, $1,365, not the $1,065, the $300 is already there because it was recorded up top when we had the payment in place. So then I'm going to close this out. The other side is going to go to the profit and loss, the P and L into sales like it normally would, not including the sales tax and the payment once again doesn't have any influence on it. The sales tax is the difference closing those two out. That's back on the balance sheet. Sales tax payable. So we've got the payable down here. Obviously that again, no impact from the advance on the amount calculation for the payable. And so I'm going to close that back out, close that back out inventory then is adjusted. It's going to go down if I double click on the inventory. Here's the amounts of the inventory for the two items. Notice those amounts aren't on the invoice but are driven by the item. Once again, the prepayment, the $300 has no impact on it. Closing that back out, closing that back out, back to the profit and loss, the cost of goods sold is here. If I double click on that, we can see these two amounts, the same amounts for the cost of goods sold, closing it out. The difference between the sales and the cost of goods sold is the impact, the net impact on net income. Back to the balance sheet. We also know that the receivables is going to be supported by the customer balance detail report. So here we have the invoice again on the books for the full amount. So if I go into here, the full amount here, not this amount, but it nets out to that 1065, which is still owed, which is great because that's what's on the bottom of the invoice. If I give that to the customer and but it nets out this way because that 300 is tied to this invoice. So we have a partial payment. So that beautifully fits together. That's the point of doing this method. It works from a bookkeeping standpoint quite nicely, even though until this happened, we kind of had this this negative receivable, which wasn't quite proper. So there's pros and cons to using that method. If I go to the customer center over here, then also it works out beautifully in here because now I can see that this payment is applying out to this invoice as I go into this invoice and see, you know, the payment applied out. I can close this out. Let's go back to the balance sheet and just take a look at the inventory inventory sub ledgers going to be up top reports up top. We're going to go into the inventory valuation summary and so it's been adjusted 123123 and it's now at the 5226 for the inventory items sold, which ties out to the 5226 here. Okay, so we're going to leave it there for now and notice that these other two items that we have these advanced payments for these other two customers that 200 right here, for example, we'll leave that we'll leave at least one of them there so that when we get to the end of the period and we do the month in reports, we can see kind of the adjusting process that you might use in order to keep the bookkeeping as nice and neat and beautiful as it has been here for Mr. Anderson, but also adjust periodically at the end of the month using adjusting and reversing entries to exactly properly report your financial statements as of the end of the month as of the end of the year using the adjusting and reversing entries. Notice if I go back to the home page here that if I went into the receive payments for Mr. Anderson, then now we have of course the invoice down below with the original amount, but the amount due would be the 1065 so that would be the next step if we were to receive you know the payment on the invoice and so on and go forward with the normal process of that point. I'm not going to record it though the next step would of course then be the deposit. Let's go ahead and take a look at the balance sheet or the trial balance reports drop down check out our numbers with the accounting and taxes the trustee TB 010123 to 123123 customize it font and number it change it 16 it okay yes it okay there it is so you can check your numbers and if everything ties out great if not try changing the date range to see if it's a date range issue and then you can drill down change your numbers as necessary. We will be taking a look at a transaction detail report at the end of the data input for the second month which can help to drill down hone in on any problems.