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C
cf9
June 18, 2020
Question

How do I record return of deposit (not full amount) ?

  • June 18, 2020
  • 2 replies
  • 0 views
how do i record the return of a security deposit but not the full amount, it is currently a line on the accounts as non current asset, when i put the money back in say -10% the accont won't balance, I'm guessing i need to create another item along lines of "Security deposit deduction" and that will be a liability? or what type of account i'm not sure, all the answers i have seen are from other way round mainly real estate businesses managing client funds, this is me paying out then getting back a deposit for my business.

2 replies

R
RCV
June 18, 2020

Let me help you record return of deposit with the partial amount in QuickBooks Online (QBO), cf9.

 

Yes, you are right, once you post a security deposit it will be posted to a liability account. In QBO, we can refund the part of a security deposit by issuing a check for the portion to be refunded.

 

Then, record an invoice for the remaining amount. Once done, we can enter a credit note/adjustment to correct the liability account to zero out the tenant balance.

 

For the steps and details,  please follow the steps below:

 

  1. Write a cheque for the amount to refund. You can start the process of refunding part of a security deposit by issuing a check for the portion to be refunded.
  2. Create a product or service item to use on the invoice for the un-refunded portion of the deposit.
  3. Make an invoice for the un-refunded portion of the deposit. Just enter the amount of the portion of the deposit you are not returning to the Amount field.
  4. Enter a credit note for the un-refunded amount. We need to enter the amount that is not being returned to the tenant in the Amount field.
  5. Once done, apply the credit to the invoice you created. Just follow Step 2: Apply the credit note to an invoice section in this article: Create and apply credit notes or delayed credits in QuickBooks Online. 

Then, the tenant and the liability account will have a zero balance.

 

I've got a link here that provides you with articles about managing your business in QBO: https://quickbooks.intuit.com/learn-support/help-articles/misc/03/help-articles-sg?label=QuickBooks%20Online.

 

Keep me posted if you need a hand with reconciling your accounts or any QBO related. I'm glad to help. Have a great day ahead. 

C
cf9Author
June 18, 2020

thank you for taking time to respond, I think you are starting it from the other side of the fence, as I mentioned in my question I am not receiving a deposit from a client etc.  I have paid the deposit for a property I rented, am now moving out so getting my deposit back, but not the full amount....this is a non current asset for me, (the landlord is the liability) you have answered it from the opposite perspective, the deduction for me, is an cost/expense I won't get back, so for me/my business this needs to be accounted for and balanced, or my non current asset deposit line will have a small balance.  i'm guessing setup a expense account and do journal entry between the two ?

R
RCV
June 18, 2020

Thanks for clarifying and coming back with us, cf9.

 

Yes, you are right. You can create an expense account and record the transaction as a journal entry.

 

To create an expense account, just follow the steps below:

 

  1. Click Accounting on the left side menu.
  2. Choose Chart of Accounts.
  3. Tick the New button to create a new account.
  4. In the Account Type dropdown menu, choose Expenses.
  5. Select the detail types that best fit the types of transactions you want to track in the Detail Type drop-down.
  6. Enter Name and Account details.
  7. Tap Save and Close. 

For more details about this one, check out this article: Add an account to your chart of accounts in QuickBooks Online.

 

Then, create a journal entry to record the return of a security deposit with the partial amount. In this case, it would be best to consult your accountant on how to properly record one. They'll also help you with what affected accounts you'll need to use when recording the transaction.

 

I've got a link here that provides you with articles about managing expenses: https://quickbooks.intuit.com/learn-support/manage-suppliers-and-expenses/misc/02/manage-suppliers-and-expenses-sg?label=QuickBooks%20Online.

 

I'm just one reply away if you need anything else in QBO. Wishing you and your business continued success. Have a great day ahead. 

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