(Thunder Bay, ON)
How to record a forfeited deposit
I work for a construction company and we deal in supply and installation of home improvement products.
A client ordered products from us to be supplied and installed. Our policy is a 25% deposit must be paid prior to ordering.
The client paid her deposit of $370.00. Long story-short, she decided on the day we were going to install that she did not like the product. (Keep in mind she saw what she was ordered in our showroom).
She now forfeits her deposit but I am unsure how to record this - otherwise her deposit of $370.00 will be sitting on our books with no sale to offset it.
Create an item in QuickBooks called "Forfeited Deposits". Code it to an income account. If you don't have a lot of forfeited deposits, I'd code it to "Other Income".
I'm not sure where your deposit is sitting - as a credit on her A/R subledger or as a current liability
. Wherever it is, you now want to apply the deposit to your sales item "Forfeited Deposit" taking it into income.