Best way to record invoice that was cancelled by customer that had a deposit paid on it.

The easiest way to cancel an invoice and issue a refund of the deposit to the customer is to:

1. Create a credit memo. A credit memo is a document that is used to reduce the amount owed by a customer. To create a credit memo, you will need to enter the customer's name, the invoice number, the date of the credit memo, and the amount of the refund.
2. Issue a refund to the customer. Once you have created the credit memo, you can issue a refund to the customer by check, credit card, or other payment method.
3. Update your accounting records. Be sure to update your accounting records to reflect the cancellation of the invoice and the issuance of the refund.

Here is an example of how to record a cancelled invoice with a deposit in QuickBooks Online:

1. Go to Sales > Credit memos.
2. Click New.
3. Select the customer's name from the Customer drop-down menu.
4. Enter the invoice number in the Invoice number field.
5. Enter the date of the credit memo in the Date field.
6. Enter the amount of the refund in the Amount field.
7. Click Save and close.

Once you have created the credit memo, you can issue a refund to the customer by following these steps:

1. Go to Sales > Refunds.
2. Click New.
3. Select the customer's name from the Customer drop-down menu.
4. Enter the credit memo number in the Credit memo number field.
5. Enter the refund amount in the Amount field.
6. Select the refund payment method from the Payment method drop-down menu.
7. Click Save and close.

By following these steps, you can easily cancel an invoice and issue a refund of the deposit to the customer.