If i click on each negative transaction in bank deposit, it reduces the balance of undeposited funds is this correct?

Thanks for checking in with us, lizzieharrison.

Yes, it will reduce the balance of Undeposited Funds. Once you match the deposit transaction on the Banking page and payment under the Undeposited Funds account. If you need to link a deposit to an invoice or a sales receipt, make sure there's an invoice for the customer, or the payment is not yet entered and linked to the invoice. Here's how:

1. Go to Banking from the left menu.
2. Under the For review tab, select the bank transaction that you want to match with the invoice in QuickBooks.
3. Tick Find match. If you have the invoice created with the same information such as amount, date, and payee, you will see the result under Matching records found. Make sure the details are the same.
4. Press Match.

To learn more about this one, see the Record and make bank deposits in QuickBooks Online article. For more details about reviewing downloaded bank and putting them in the correct accounts, check out the Categorise and match online bank transactions in QuickBooks Online article.

Feel free to visit our Banking page for more insights about managing your bank feeds. 

I'd like to know how you get on after trying the steps, as I want to ensure this is resolved for you. Just reply to this post and I'll get back to you. Take care always.