Jounral Entries to handle prepaid customer deposits

It's a pleasure to have you here today, @jim77144. We'll help you enter a journal entry inside your QuickBooks Online (QBO) company.

To utilize the journal entry feature inside the program, you'll want to go to the +New button and choose Journal Entry. These are the steps:

1. Access your QuickBooks Online company.
2. On the left navigational bar, click the +New button.
3. Select Journal entry.
4. Choose an account from the Account field on the initial line. Based on whether you require a debit or credit for the account, input the appropriate amount in the corresponding column.
5. Please select the alternative account you wish to transfer funds to or from on the subsequent line. Based on whether you recorded a debit or credit on the initial line, input the identical amount in the corresponding column.
6. Check the amounts - you should have the same amount in the Credit column on one line and the Debit column on the other. This means the accounts are in balance.
7. Enter information in the memo section so you know why you made the journal entry.
8. Once done, select Save and new or Save and close.

You can visit this page for more details and instructional video: Create journal entries in QuickBooks Online.

In case you're unsure of what accounts to use when entering a journal entry, you can refer to your accountant so they can help you out. If you don't have an accountant, we can help you find one. Feel free to visit this page to find an accountant for your business: Find a QuickBooks ProAdvisor.

On the other hand, we got you this article to help you manage your entries: Reverse or delete a journal entry in QuickBooks Online.

Feel free to visit us if you need more clarification on journal entries or assistance with QuickBooks tasks. We highly encourage you to ask again anytime. Have a good one.

@jim77144 

For the deposit, did you create a product and add it to an invoice or did you just create a liability account and assign that to the payment received?  If you created a product and added it to an invoice, you can add that same product to the final invoice as a negative amount.  That will close the liability account and reduce the amount due on the invoice.  If you posted the deposit to a liability account without using a product, make a journal entry: debit the deposit liability account and credit A/R for the amount of the deposit.  That closes out the liability account and gives the customer a credit that can be applied to the final invoice when you go to New > Receive payment.