How to process Purchase Order deposit refund/credit

This document defines methods to account for deposits made for purchase orders where some or all of the products have not received.

There are a couple different scenarios which could exist for the settlement of the balance of the deposit  as follows:

  1. If additional purchases are expected to be made from this supplier, the balance of the deposit can be processed as a negative balance on the supplier account which can later be offset against future payments of supplier invoices.
  2. The supplier is intending to send a check for the balance of the deposit. 


Using an example where one of the purchase order line items for $154.50 cannot be delivered, the following examples for each of the scenarios defined above explains the details of each transaction.

  1. Enter a payable with a negative Invoice Amount for the amount of the refund and Deposit Applied for 154.50.


  1. This requires two transactions – both will be using the Contra AR/AP general ledger account:
    1. Enter a payable to clear the balance of the deposit as follows:  3_a1.png3_a2.png
    2. When the refund check is received, enter a Bank Deposit for the refund check:3_b.png




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