how would you record giving back money to a customer who paid you immediately in that
case you would make a refund receipt if you have any questions about this topic you can
leave them in the comments section below and I'll do my best to help you and of course if you feel
the video helped you I hope you will click like and don't forget to subscribe to get updates on
new videos that come out all the time you will record a refund receipt when you are refunding
money from a sale receipt not an invoice it is the exact same steps as making the original sale
receipt however it has the opposite effect of the original sale receipt you must use the same
items or income accounts that were on the original sale receipt that is being refunded in other words
on the original sale receipt the income went up when you put the item onto the receipt and then
of course when they paid you either cash and bank or undeposited funds went up that means when you
make the refund receipt of course cash and bank will go down because you're paying back money but
the original income account that went up for the original sale receipt will go down by the amount
of the refund for example back on January 18th we made a sale receipt for betty 416 video hours
when we did that video income went up and because she paid us directly to the bank account cash and
bank also went up by the same amount now the trial balance you see includes the result of that sale
receipt and these are the numbers we have before we record our first refund receipt now let's
imagine on March 19th we refund to Betty only four of those 16 hours and in order to do that
we write her check number 14 well when we do that video income will go down because if we're giving
back money for a video job we earned less video income and of course if we're giving back money
cash and bank will also go down and the amount that both of those accounts will change is $1,200
so that means that after the refund cash and bank will decrease by $1,200 and become 27 thousand
two hundred ninety video income will decrease by $1,200 and become 48,000 even let's take a look
at how to record it in quickbooks online now here we are in quickbooks online with all the
numbers and the trial balance before the refund receipt to record the refund receipt we click the
plus sign we go all the way over to the column that relates to customers and we choose refund
receipt now filling this out is exactly the same as filling out the original sale receipt we choose
the proper customer in this case Betty Boop now in our little story we are recording this refund
receipt in march or on march 19 of 2017 please put the correct year that's very important now down
here where it says received from you can refund from actually you have to choose the account
that you're paying from we're not giving her back petty cash we're paying the money from a cheque
which is cash in bank so it's coming from cash and bank and we're going to put cheque number 14 now
have to put the product or service that we're refunding in this case it was video because the
customer was not satisfied with 16 video hours so we're a funding for of those video hours back
to customer Betty and that makes the amount of the refund $1200 that we pay Betty with check
number 14 which reduces video income because we've earned less video income if we're giving
back some of the money for a video job click Save and new and successfully issued in the amount of
1200 that's a good confirmation now when we click OK we can close the receipt window and go back to
the trial balance and you can see cash and bank is exactly the number we expected twenty-seven
thousand two hundred ninety and video income is exactly as what we expected 48 thousand you