Skip to main content
V
victoriah1956
January 15, 2024
Solved

Can a fraudulent transaction be written off as a bad debt, or?

  • January 15, 2024
  • 2 replies
  • 0 views

In QBDT Premier Plus Contractors Ed, 2024,

I need to record a fraudulent transaction in which we tried to purchase a tool on FB market place and was scammed = we paid the money, but never got the tool.

Can we follow the same procedure to write this off as a bad debt?  

I created an Expense Account, called Bad Debt.

But, it's not a Customer, it's a "Vendor" (I use this term lightly)

What are the steps to record a Bad Debt created by a Vendor, as opposed to a Customer, please?

 

PLEASE don't tell me to ask my accountant!  I need an answer from this community - this IS the Q & A forum, is it not?

Thanks in advance for any insight you can give me.

 

Best answer by Rainflurry

@victoriah1956 

 

Yikes, sorry for the loss.  Technically, it's not a bad debt expense.  That applies to uncollectible receivables.  It's certainly a legitimate expense and should probably be recorded as 'Fraud Expense' or something similar.  It's really up to you what operating expense account you want to use.  Whatever expense account that, assign that to the bill used to pay the "vendor" and you should be all set.   

2 replies

J
JamesAndrewM
January 15, 2024

Thanks for dropping by the Community forum. I see you want to record a fraudulent transaction in QuickBooks Desktop. I'll share information and guidelines to help you successfully record this transaction.

 

When invoices you send in QuickBooks Desktop become uncollectible, you need to record them as a bad debt and write them off. Here's a step-by-step guide:

 

First, ensure you have an Expense Account for Bad Debt (which you've already created). Then, create an Expense/Check:

 

  1. Go to the Vendors menu and select Enter Bills.
  2. Choose the Vendor for whom you want to write off the bad debt.
  3. Under the Items tab, add the original item with a negative quantity as well as the amount.


     
  4. Under the Expenses tab, add the bad debt account with a positive amount.


     
  5. Save the bill.

 

I'm adding these articles you can use in the future:

 

 

By following these steps, you can offset the items in the inventory you haven't received. If you have more questions about managing your transactions, post them here in the forum. I'll be sure to answer them ASAP! Have a great day ahead!

V
victoriah1956Author
January 16, 2024

JamesAndrewM:

Thanks for trying to help, but I'm not convinced this is the correct solution.  

We don't track inventory at all, at any rate.

Best,

Rainflurry
RainflurryAnswer
January 15, 2024

@victoriah1956 

 

Yikes, sorry for the loss.  Technically, it's not a bad debt expense.  That applies to uncollectible receivables.  It's certainly a legitimate expense and should probably be recorded as 'Fraud Expense' or something similar.  It's really up to you what operating expense account you want to use.  Whatever expense account that, assign that to the bill used to pay the "vendor" and you should be all set.   

V
victoriah1956Author
January 16, 2024

Rainflurry,

 

Thanks for the reply to this question.  I appreciate the clear cut solutions you always present here.

Best,

Victoriah

Terms & ConditionsAccessibility statement