Category for Credit Card Refund for Inventory Never Received
cor_mann
Member Posts: 2
Hi. I purchased inventory items using a credit account; however, the money was refunded back to the same account without ever receiving the inventory items. The purchase transaction is categorized under Inventory assets. My question is: how do I categorize the refund itself so that it negates the original inventory purchase? One of the existing options is Refund to Expense, but the purchase was not an expense. I also don't want it to appear that the items were received and sold at an identical price.
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Hey cor_mann,
What you may want to do here is create a journal transaction to account for the refund (click on "More" in the top right of the page to add a journal transaction.)
The transaction should debit the credit account that the refund is going to, and debit Inventory. This will zero out the amount that was recorded to inventory, and reflect the funds being returned to the account.
Once you've added this journal transaction, delete the refund transaction from your bank as it will have already been accounted for!
^ Thank you James!
would it work if I were to categorize the refund transaction under my inventory (assets) account, instead of adding the journal transaction?