 the customers, the customer center, sales customers. And then if I go into Mr. Anderson, there we have it. So now Mr. Anderson has a lot of information, but that 300 is clearly the outstanding balance, which is a credit balance, which could be applied to a future purchase, such as in our case, the invoice. I'm gonna imagine we go back in time and we first made the estimate. So Anderson's in our shop saying, I want this crazy, plaid, pink guitar. And we're like, okay, but you're gonna give us a down payment because we don't wanna get stuck with that thing. So we're gonna say, this is gonna be Anderson guitars. Let's make an estimate. We'll tell you how much it costs, and then we want you to give us a down payment. So we're gonna be like, okay, that looks good. Expiration date, I won't have one. And then down here, we're gonna say the product. What does he want? He wants an EPSH, we're gonna say. And for whatever reason, he wants two of those we're gonna say. And then we're gonna say that he wants a ELP that we're gonna have to order or reserve for him particularly. And we're like, okay, we'll save the guitar or we'll order the guitar, whatever we have to do. That comes out to the 1,300. But I'm gonna do the generic five sales tax. So notice the estimate allows us to calculate the sales tax. So we're gonna say, that's great. It's gonna come out plus the sales tax at 1,365. Then I could use this number to then calculate the down payment. Maybe like 10% of that or 20% of that or whatever our policy is. So that's how we might do the calculation of the sales tax to then make the payment. Noticing that the estimate doesn't actually record anything. This is just an estimate internal form. No impact on the financial statements. It's similar to another form that doesn't have impact in that that being the purchase order. Those are the two forms we've looked at thus far that don't actually impact the balance sheet, the income statement. So let's go ahead and save it. Normally we would save and send it, but I'm just gonna save and close it here. Let's say just save and close. And boom, I'm gonna close that. All right, so now if I look at Mr. Anderson, we can see that we have the outstanding estimate and we've got the payment. So you can imagine this happening from someone else that was in the shop that took down Mr. Anderson's estimate and collected the down payment. And then a different bookkeeper comes in and now Mr. Anderson has the guitar and we're selling it. We can see clearly what happened here. We're like, oh yeah, here's an estimate. It looks like we made an estimate. And then there was a $300. It's a credit that looks like it's gonna be applied to the future purchase that we can make from the estimate. That was your down payment, is that right? See how pretty much transparent it is from the bookkeeping side of things. So let's do that now. So now I could go into the estimate, like I could go into the estimate and say now on the bottom of the estimate, I have the capacity to convert to an invoice. So I'll convert it to an invoice. And so now we got the actual invoice that we're gonna be putting in place. The estimate has been pulled in. So good, thank you. I'm gonna close this up and it's gonna keep on bringing it back, I think, but we're gonna try to close that up on 225, okay. So we'll keep that. We've got our invoice being created and then it just pulled in the information for our invoice. Now notice what it did not do down here. We have the same look as the estimate did. It did not apply out the credit for us. So what happens is we're gonna record it and then we're gonna tie out the credit and go back into it. So if this was the invoice, I wouldn't basically email the invoice as it is thus far but rather record it and then apply out the credit and then we'll have the balance at the bottom. Noticing that when we look at the balance at the bottom it's gonna result in the same journal entry. The journal entry, just like any invoice journal entry is gonna be saying increase accounts receivable, the 1365 for the total amount. The other side's going to revenue 1300, the difference 65 going to the sales tax payable and we have a decrease to the inventory, not by this dollar amount, but by the cost known by the item, cost to goods sold, expense related to us selling the inventory is gonna be going up, net impact on net income 1300 minus the cost to goods sold and we'll have an impact on the accounts receivable broken out by customer and the inventory broken out by units of inventory. So what about the 300 that's already been given to us? Well, it's already been recorded. It's already on the books. So if I was to record the 300 here on the invoice it would just be an informational documentation to then show the amount that is still due. It's not gonna affect the actual journal entry. All right, so let's save it and close it and see if I can explain that further. So now we have then the amount of the 1365 of the invoice and then we've got the unapplied amount up top. Now, if you have the settings, sometimes the settings in QuickBooks used to be that the default would be applied out basically automatically, but a lot of times you may not want it to be applied out automatically. So I can then go back into this one. I'm gonna say, let's edit this view on this credit. And if I go down into it, now I can apply it out. So there's the 300. I now have the invoice that I can apply it to. And so I can say, okay, I wanna apply it to that invoice just like I normally would, but now I'm going back into it to apply it out. So these two things are connected now. So now if I save and close this, what's this gonna do by the way? Nothing new in terms of debits and credits. It's only internally something that's happening new. That the transactions have already been recorded, the balance sheet and income statement already impacted. Now what is happening is I'm just tying these two things together, the payment being a tie to the invoice. So once I do that, then this amount is now closed and I can see on the invoice that it has been, part of it has been paid. So if I go into it, we can see the activity. It's open and then we paid, it has a payment item there. Let's go into the edit then. If I go back into the invoice this way and then go to the bottom of the invoice, you can see now that we have the 300 applied and we have the amount that is still due.