We bought stock from a Supplier and returned some items. The Supplier gave us a C/Note and deposit the amount into our bank account. how do I capture this transaction.

It's a pleasure to have you here in the Community space, Maria. We'll provide details to help record the items returned to your supplier and the account credit note or refund you received.

Before anything else, please know that recording a refund from a supplier depends on how you entered purchases inside QuickBooks Online (QBO). You can enter it as a vendor credit and a deposit inside the program and link both transactions to keep expenses accurate.

Now, let's ensure the refund goes to the appropriate expense account and enter the vendor credit using these steps:

1. Access your QuickBooks Online company.
2. On the left navigational bar, click the +New button.
3. Select Vendor Credit.
4. In the Vendor drop-down menu, select your vendor.
5. Depending on how you record purchases with this vendor, enter all returned stock items, their quantities, and rate in the Item details section.
6. Once done, select Save and close.

Once done, refer to this page for more details on how to enter a bank deposit: Record and make bank deposits in QuickBooks Online.

After making a bank deposit, you'll want to link them to the vendor credit through these steps:

1. Access your QuickBooks Online company.
2. On the left navigational bar, click the +New button. sign.
3. Click Pay Bills.
4. Select the bank deposit you just created. You’ll see the amount of the vendor credit in the Credit Applied field. The Total payment should be $0.00.
5. Select Save and close.

We're also providing this handy article for other ways to handle a refund from a vendor inside the program: Enter supplier credits and refunds in QuickBooks Online.

You can also refer to an accountant if you're unsure of the method and steps provided. This way, they can provide you other ways to account for this situation. If you don't have an accountant, I can help you find one. Feel free to visit this page: Find a QuickBooks ProAdvisor.

Additionally, you can check this page to help you keep track of transactions you made with suppliers: Run a report with supplier totals.

Feel free to visit us anytime or comment below if you require further assistance recording vendor refunds inside the program. Our team will respond as soon as possible to address your queries. Keep safe.