A Cash Refund should only be used to refund a prepayment or overpayment. A cash refund is issued immediately and has no impact on the Accounts Receivable General Ledger. The GL impact is credit on Undeposited Funds.
Here are the steps in creating a Cash Refund.
Save or Post the record. The Invoice No field will be filled in with a unique and system generated number.
You can skip saving the record if the transaction is to be posted right away since it will be saved automatically. |
Here is a sample cash refund.
Let us view the GL entries when this invoice is posted. Click the Recap button. Notice that is has a direct impact on Undeposited Funds, and not on Accounts Receivable.