How do you record a credit card chargeback that was reversed?

Thank you for providing insights on your current situation, @bigfootz. I'll help supply details below on how you can record and resolve this in QuickBooks Online (QBO).

To begin with, you'll want to record the transactions as Checks while ensuring they have separate expense categories for the fee and the returned amount. These are the steps:

1. Access your QuickBooks Online company.
2. On the left navigational bar, click the + New button and select Check.
3. Select the checking account that your merchant account processor uses for your credit card transactions.
4. Select the customer's name that you used for the original credit card payment transaction.
5. Delete the checking number. In its place, enter a note to indicate that this check is actually a chargeback, such as CB.
6. Enter the total amount of the chargeback item.
7. Uncheck the box beside Print later checkbox.
8. For the Account, choose the account that you charge for the transaction.
9. Once done, click Save and close.

Visit this article for more details: Create and record checks in QuickBooks Online.

To record the reversed amount, you'll need to enter a bank deposit and make sure to make it affect the same category used to record the returned amount in the Check. For more details, feel free to refer to this page: Record and make bank deposits in QuickBooks Online.

Once done, your next move would be to match the payment to the initially downloaded transactions amounting to $1000. You'll then match the check to the $1025 chargeback expense. Lastly, match the bank deposit you created earlier to the second payment worth $1000. Here's an article to guide you: Match online bank transactions in QuickBooks Online.

It's also recommended to contact your accountant for guidance on what categories to use when recording the expense transaction. By doing so, they can help you guarantee the accuracy of your records in QBO. If you don't have an accountant, I can help you find one. For more details, please visit this page: Find a QuickBooks ProAdvisor.

Additionally, you can check out this article to help you manage bank transactions in QBO: Reconcile an account in QuickBooks Online.

Need assistance handling bank transactions in your QBO company? Our QuickBooks Live Expert Assisted can offer tips and guide you to streamline the process of handling this task.

You can count on me to be always available and ready to assist you in resolving future QuickBooks-related inquiries you may have. Please don't hesitate to comment below so I can respond right promptly.