You now have a record on how to track this credit from Maytag. With the drill down features you can see what serial number you returned from the customer statement. The result to the general ledger will now be.
Vendor Returns
The process for a vendor return is:
For an explanation of Vendor Returns we must first talk
about what happens when we receive inventory.
When a Vendor Purchase Order is turned a Vendor Invoice and is Posted the
results in the general ledger are as follows:
| Inventory Account | $1000.00 | Debit |
| Accounts Payable | $1000.00 | Credit |
When a Vendor Invoice is Paid the results in the general ledger are as follows:
| Accounts Payable | $1000.00 | Debit |
| Cash in Bank | $1000.00 | Credit |
Therefore the general ledger has an inventory value of $1000.00 and checking has a negative value of $1000.00.
A vendor return must reverse the state of the general
ledger. First we must do a Inventory Adjustment.
The 'GL Adjustment Account' on the main form of the inventory adjustment must be
set to your Accounts Payable account.
| Inventory Account | $1000.00 | Credit |
| Accounts Payable | $1000.00 | Debit |
We then want to track the credit that our vendor owes us. We will then create
a accounts receivable customer called 'VendorReturn'. We then will load the 'VendorReturn'
statement and complete an adjustment as follows;
You now have a record on how to track this credit from Maytag. With the drill
down features you can see what serial number you returned from the customer
statement. The result to the general ledger will now be.
| Purchase Returns | $1000.00 | Credit |
| Accounts Receivable | $1000.00 | Debit |
Now comes the question on how funds will be supplied to you from the vendor.
Funds can come in the form of a check or credit that you will be able to take on
another invoice. First lets deal with the situation when you receive a check.
The process is that you take a customer payment for $1000.00 on the 'VendorReturn'
account. Apply the payment to the adjustment, which will satisfy the credit. We
then will deposit the check with a regular checking account. After the process
of taking a payment, verifying funds, then the bank deposit the result to the
general ledger will be:
| Accounts Receivable | $1000.00 | Credit |
| Cash in Bank | $1000.00 | Debit |
Therefore we are done. The final state of the general ledger is this:
| Accounts Payable | $1000.00 | Debit |
| Purchase Returns | $1000.00 | Credit |
If the vendor funds come in the form of a credit we then use a tool that is available at the top of the customer statement called 'Trans AP'. You highlight the funds that you want to transfer from the accounts receivable to the accounts payable vendor account 'Maytag'. Then click on the toolbar button called 'Trans AP'. The result to the general ledger will be:
| Accounts Receivable | $1000.00 | Credit |
| Accounts Payable | $1000.00 | Debit |
When you pay the vendor you take the credit and apply it the payment to the vendor. This is done be creating a payment. Then on the toolbar click 'Invoices'. There will be four tabs along the top of this screen. One will be called 'Credits'. Apply the credit amount. On the bottom of this form click 'Apply'. The result to the general ledger will be:
| Accounts Payable | $1000.00 | Credit |
| Cash in Bank | $1000.00 | Debit |
Therefore we are done. The final state of the general ledger is this:
| Accounts Payable | $1000.00 | Debit |
| Purchase Returns | $1000.00 | Credit |