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dfampound
April 13, 2025
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Bounced retainer check

  • April 13, 2025
  • 1 reply
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Customer sent a down payment on a job; when this occurs I create a Sales Receipt, and when the parts arrive and job is invoiced, deduct the down payment from the invoice.  However, this check has bounced.  I did the manual entries in QB as there was no payment made, so the Bounced Check feature in the Payment screen was not available.

When I run a cash basis balance sheet, the original amount shows up in A/R.  Do I need to do a journal entry to get this out of my balance sheet, and how do I do that - I am not very good at journal entries, I get myself confused pretty quickly doing that.

    Best answer by Dandie_A

    I appreciate you for providing the details, dfampound. Creating a journal entry is essential to correct your balance sheet due to the bounced check. Here’s a step-by-step guide on how to create this journal entry.

     

    Here's how:

     

    1. Navigate to the Company menu.
    2. Select Make General Journal Entries.
    3. Set the date of the journal entry to the date the check was bounced.
    4. In the journal entry:
      • Credit the Accounts Receivable account with the amount of the bounced check to decrease your A/R (this part removes the down payment from A/R since the payment didn't materialize).
      • Debit the appropriate income account (where the revenue was originally recognized) with the same amount to decrease it as well. This step removes the revenue recorded by the initial sales receipt.
    5. Add a memo to the journal entry describing the purpose: Example: To reverse bounced check for sales receipt #1234.
    6. Select Save & close to record the journal entry.

     

    After saving the entry, review your Balance Sheet to ensure that the entry corrected the A/R and the income account as intended.

     

    Additionally, to make a journal entry in QuickBooks Desktop, you can refer to this article as your guidelines: Bounced check from Customers.

     

    Moreover, once the customer makes the full payment, you can record it in the Received Payments section of QuickBooks Desktop.

     

    By following these steps correctly, the adjustments will accurately reflect that the down payment was never actually received when you generate cash basis reports. Feel free to leave a comment below by clicking the Reply button. We are always here to help!

    1 reply

    D
    Dandie_AAnswer
    April 13, 2025

    I appreciate you for providing the details, dfampound. Creating a journal entry is essential to correct your balance sheet due to the bounced check. Here’s a step-by-step guide on how to create this journal entry.

     

    Here's how:

     

    1. Navigate to the Company menu.
    2. Select Make General Journal Entries.
    3. Set the date of the journal entry to the date the check was bounced.
    4. In the journal entry:
      • Credit the Accounts Receivable account with the amount of the bounced check to decrease your A/R (this part removes the down payment from A/R since the payment didn't materialize).
      • Debit the appropriate income account (where the revenue was originally recognized) with the same amount to decrease it as well. This step removes the revenue recorded by the initial sales receipt.
    5. Add a memo to the journal entry describing the purpose: Example: To reverse bounced check for sales receipt #1234.
    6. Select Save & close to record the journal entry.

     

    After saving the entry, review your Balance Sheet to ensure that the entry corrected the A/R and the income account as intended.

     

    Additionally, to make a journal entry in QuickBooks Desktop, you can refer to this article as your guidelines: Bounced check from Customers.

     

    Moreover, once the customer makes the full payment, you can record it in the Received Payments section of QuickBooks Desktop.

     

    By following these steps correctly, the adjustments will accurately reflect that the down payment was never actually received when you generate cash basis reports. Feel free to leave a comment below by clicking the Reply button. We are always here to help!

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