Occasionally a contact might accidentally deposit money in your bank account in error, as overpayment or through accidental duplication.
These transactions can be handled in many different ways. Three examples are:
- Refund the amount.
- Accept the amount as a deposit for goods or services already ordered.
- Apply the extra payment to a different Sale.
This support note will deal with the first example above. The other two examples are handled by payments and deposits for goods and services.
Booking the received money and refunding it.
Assuming you have received funds into you bank account and then later repaid them from that same bank account the following entries would reflect these transactions:
In this example we will use a Loan Account or Loan Account to clear the amount received in error. If you aren’t sure that this general method applies to you we strongly recommend you check with your accountant first.
NOTE: Amounts are always entered as positive numbers in General Journals
- Click the Add icon to create a new General Journal from the main menu. The Add General Journal screen will appear
- Date the transaction the day you received the money in your bank account.
- Add the following transaction items:
NOTE: don’t select any tax codes.DEBIT Asset: Bank Account $x CREDIT Loan: Deposit Received $x - Click Save and Add Another. The Add General Journal screen will appear again.
- Date this second transaction the date you repayed the money from your bank account.
- Add the following transaction items:
NOTE: don’t select any tax codes.CREDIT Asset: Bank Account $x DEBIT Loan: Deposit Received $x - Click Save and Close
You have created two General Journal transactions that will allow the amounts to appear in your Bank Statement report. This will make it easy to reconcile your bank account when the time comes. The Loan: Deposit Received account is acting as a clearing account. It allows the amount received and later paid to balance each other out even though they might not occur on the same date.
