Expert: Arthur Naman - 2/15/2011

Question
We made a credit card purchase last June. It has never appeared on our credit card statements. Apparently it has been lost by the vendor. I entered the purchase into QuickBooks. How do I make the journal entry to reverse it? There are four accounts involved, not including the credit card account itself. I don't know what to debit and what to credit. Can you help? Thanks so much!

Answer
I apologize for taking so long to answer this. I had to take the time to get to a computer with Quickbooks "QB" loaded.

By your having used the credit card feature of QB, the transaction needs to be reversed via a credit card credit memo rather than via a journal entry. As you have not had this entry appear on your credit card statement, I believe you are "out" the money you are owed. Also, this entry should show as an unreconciled difference between the amount you show in QB and the amount shows as owed to you on the credit card statements.

By entering the transaction via a credit memo, your sales should be reduced, the sales tax owed should be reduced, and the funds owed to you by the credit card company should be reduced.

If this is not clear, please ask however many follow-up questions you need so that the transaction is clear.

Again, I apologize for taking so long to get back to you.