 Mr. Anderson comes in and now I can see okay yeah I've got an estimate here and then I've got the $300 that I'm trying to apply to it so if they actually come in and they want to follow through with that after making this payment we're going to say okay then I could create the invoice from the estimate if I so choose if I didn't make an estimate then I can just create the invoice of course and then I'm going to try to apply this $300 to it so I could go in here and say okay let's complete this by going to create the invoice from the estimate okay so we're going to say okay pulled it in here we've got the the date 225 let's keep that and then it pulled in this information and then down below it pulled in the rate at the 5% as well so I don't have to change the tax so it looks good now notice what it's not doing it's not applying out that $300 and you would think that you'd you think maybe it wouldn't have a little thing over here that applies out the credit to the invoice and that's not really the way it QuickBooks does it for whatever reason with the credit we're gonna basically record it and then QuickBooks usually will automatically apply the credit and then we can basically go back into the invoice after that point and it should apply the credit out so it's a little bit of a two-step kind of process so in other words this is an invoice what does the invoice do it's it's going to increase the accounts receivable the other side's going to go to sales 1365 and and I'm sorry the other side goes to sales of 1300 the difference of 65 goes to the payable for sales tax and then inventory goes down by an amount driven by the items cost of goods sold goes up net income is impacted by the sales minus the cost of goods sold also the sub ledger for Anderson will be affected by customer the sub ledger for the guitars will be impacted so let's go ahead and save it and close it and we're going to then take a look at Anderson's stuff here so so now if I look at notice all automatically then you've got this invoice has a partial amount because they applied out the three hundred dollar payment to it automatically now the settings are on so that it does it kind of automatically like that so if I go to that three hundred dollars right there it applied it out basically automatically so if I go back into that then notice now it's checked off the invoice and it applied it out automatically to that invoice if you didn't want that to happen for whatever reason you could turn off the settings or you can go back in here and uncheck this off so it doesn't apply out but you can just note that the default settings are to apply out the credit to the invoice so if I close this back out instead of having to do that next step it basically did it for me and then I can go back into the invoice which now has the credit applied out to it so if I scroll back down now it's got the the amount applied to it so now the invoice can be given to the customer at this point in time so notice it's a little bit tricky you have to create the invoice post it in essence then apply out the payment which is usually done automatically then go back into the invoice and you've got this thing at the bottom when you look at this at the bottom you might say well doesn't that impact the transaction that's going to happen and the answer is really no because notice from a financial standpoint this if I if I look at this application of the three hundred dollars didn't really change the actual transaction of the invoice it's just it's just an internal linking saying hey look this invoice has been partially applied out by this credit but there's no change to the impact on the financial statements in other words if I go back into the invoice the transaction is still going to be an increase to the accounts receivable of one thousand three sixty five it's just that there was already that outstanding three hundred dollars there so I don't need to post the three hundred dollars or do anything different the net balance is one thousand sixty five because that three hundred dollars was already standing as a credit right so I don't so this bottom part then isn't doing anything different to record the transaction the other side is going to go to revenue of the one thousand three hundred sales tax of the sixty five and then the the cost to get sold and inventory are clearly not going to be affected by that three hundred dollars as well