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How to handle Refunds in Accounts Payable
Due to the fact that you cannot enter negative payments (refunds) in AP the following example shows how to cope with this event:
Scenario
An employee is given 1000.00 for expenses on a trip to Germany. The employee returns and has 100.00 remaining.
Setup a MISC account in Premier Ledger.
Setup a Customer Class to point to this MISC account.
Setup a MISC Customer account for these transactions
Accounts Payable
Step 1: The 1000.00 payment
Step 1: The 1000.00 payment
Enter an ON Account payment for 1000.00
Step 2: The employee returns
Enter a voucher(s) for 900.00 (the money spent on the trip).
Step 3: Balancing the account
Enter a voucher for 100.00 (remaining money).
Step 4: Match up the transactions
Apply the ONACT payment to the two vouchers
Accounts Receivable
(These entries could be summary entries)
Step 5: Enter a Cash Receipt
Enter a cash receipt for 100.00 which will DR the Bank and CR Debtors Control
Step 6: Enter an Invoice
Enter an Invoice for the 100.00 which will DR Debtors Control and CR the MISC Account
Step 7: Match Transactions
Apply the Cash receipt against the Invoice.
|
Step |
Account |
DR |
CR |
|
1 |
Creditors Control |
1000 |
|
|
Bank |
1000 |
||
|
2 |
Expense Account |
900 |
|
|
Creditors Control |
900 |
||
|
3 |
Misc Clearing Account |
100 |
|
|
Creditors Control |
100 |
||
|
4 |
APPLY |
||
|
5 |
Bank |
100 |
|
|
Debtors Control |
100 |
||
|
6 |
Debtors Control |
100 |
|
|
Misc Clearing Account |
100 |
||
|
7 |
APPLY |
||
|
Balance |
2200 |
2200 |
