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Journal Entry

danielle swaze's Profile

I' m using quickbooks.  but could do it through a journal entry.

  • vendor bills are entered. (debit expense credit ap)
  • vendor bills are paid (debit ap credit bank)
  • Payment is made in advance (overpayment) (credit bank credit expense)
  • A credit now shows of X dollars.  Find out payments were actually fraudulant.  Bank deposits money back to us.
  • Deposit made (debit bank credit ?? )  If I credit expense it makes the credit bigger... 

I'm so lost.

Answers

(Agent, JKS Solutions, Inc.) |

Please list the account name you are talking about. Are you refering to Undeposited Funds?

Wray Rives
Title: CPA CGMA
Company: Rives CPA PLLC
(CPA CGMA, Rives CPA PLLC) |

Your third point is off. If you credit bank you debit expense. When the bank returns the money you debit bank credit expense and you are back to zero. That is strictly looking at the journal entries. The mechanics of entering it through Quickbooks transactions may be what is confusing.

Alan Bardwell
Title: CEO, Accountant
Company: Dear Accountant Inc.
(CEO, Accountant, Dear Accountant Inc.) |

Danielle,
Fraudulent overpayment in advance. Here's my solution. My questions are at the end.

Your scenario implies that 1) a valid bill from a valid vendor was received and 2) an authorized person wrote a check 3) for more than the amount due 4) before the due date. 5) Subsequently, your bank refunded you the entire amount of the fraudulent payment.

Solution - In the Chart of Accounts, create an asset called "prepaid expense", which represents vendor services/products you are owed due to paying before expenses are incurred. Similar to how insurance policies are paid, then expensed.

to record bill payable: debit expense; credit a/p

to record payment of the bill (amount due & overpayment): debit a/p; debit prepaid expense ;credit bank

to reverse fraudulent payment: debit bank; credit a/p; credit prepaid expense

If the solution works, never mind the questions. Otherwise, please provide more info.
What was fraudulent about the payment?
Why do you call the amount an overpayment?
Why do you say the payment was made in advance?

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