[GNC] best accounting practice for refund

[Eric Rathhaus (general)]

So I did assign the credit note to the AR account and then processed two payments by selecting the posted invoices and the credit note all in the AR account.  I didn’t do anything else but somehow the remaining balance of the credit note ended up in a liability account. Should I just move it back to the AR account to keep it simple?  

> On Jul 3, 2019, at 10:58 AM, Adrien Monteleone <adrien.monteleone at lusfiber.net> wrote:
> 
> If you didn’t involve a liability account initially, the remaining credit on the credit note would sit in AR. But if you ‘paid’ the credit note with a liability, you transferred that amount from AR to the liability, which is the account you will ‘pay’ future invoices from when offsetting with the credit.
> 
> Be mindful that the credit note should have been posted to AR initially.
> 
> Also that the credit note’s line items should have all been assigned to some income account, NOT a liability account. You want to decrease your income accounts with a credit note that the original invoice(s) increased. Not sure I follow u here. The first transaction was an invoice and payment to the business checking account. Now part of that payment is the credit note.  I assumed that paying the invoices in the AR account with the credit note is a reduction of an income account.  
> 
> Here’s a simplified transaction walk through:
> 
> 
> Original Invoice
> -----
> Dr. Accounts Receivable		$1000
> 	Cr. Income			$1000
> 
> 
> Original Payment by check
> -----
> Dr. Undeposited funds		$1000
> 	Cr. Accounts Receivable		$1000
> 
> 
> Depositing of check
> -----
> Dr. Checking			$1000
> 	Cr. Undeposited Funds		$1000
> 
> 
> Issuance of Credit Note
> -----
> Dr. Income			$100
> 	Cr. Accounts Receivable		$100
> 
> 
> IF you ‘pay’ (transfer) the credit note with a liability account
> -----
> Dr. Accounts Receivable		$100
> 	Cr. Customer Deposits		$100
> 
> 
> When you offset a future invoice with the liability
> -----
> Dr. Customer Deposits		$100
> 	Cr. Accounts Receivable		$100
> 
> 
> OR if you don’t involve a liability account at all, offsetting a future invoice
> -----
> Dr. Accounts Receivable		$100
> 	Cr. Accounts Receivable		$100
> 
> (in this case the money doesn’t move accounts, but gets ‘assigned’ to a different document, from the credit note to the invoice)
> 
> Regards,
> Adrien
> 
>> On Jul 3, 2019, at 12:15 AM, Eric Rathhaus (general) <rathhaus_law at yahoo.com> wrote:
>> 
>> Hi again - so everything worked the first time.  I back off all the transactions and put the credit note in the AR account, selected two invoices and the credit note , credit note reduced by that amount and the payments showed.  But I need to run another offset and the credit note no longer appears in the AR account.  The system moved it to a liabilities account and automatically opens the liabilities account when processing a payment for that company.  Is this how it should work?
>> 
> 
> 
> _______________________________________________
> gnucash-user mailing list
> gnucash-user at gnucash.org
> To update your subscription preferences or to unsubscribe:
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.