Crediting a refund back to account

[Mt Olive Church]

Expenses for VBS have been taken from the VBS fund. The left over materials were returned and a credit will be reflected on the next bill. I have tried on several occaisions to credit refunds back to an account, but it makes income and expense amounts incorrect.

Thanks,
Vicki

[tborgal]

If you do this as a transaction under Fund Accounting by debiting the checking account and crediting the VBS account you will not effect your income and you will reduce your expense. I believe this is what you are trying to do.

[Matt]

I assume that you purchase other items from the vendor besides VBS materials. And I assume you get a monthly bill from the vendor. With those assumptions in mind, let's go through a scenario on how to post a credit for returned materials.

Lets say in month 1 you purchased $100 of VBS materials. When you got the bill you paid the $100 and posted it as follows:

Debit VBS Expense $100
Credit Checking Account $100

Now let's say in month 2 you return $20 of the VBS material and get a $20 credit to your account. Then let's say in month 2 you purchased $55 of Sunday School Supplies. When you get the bill for month 2, the bill will be for $35 ($55 - $20 credit). When you pay the $35 bill you would post the payment as follows:

Debit Sunday School Supplies $55
Credit VBS Expense $20
Credit Checking Account $35

Accordingly, after month 2 your records would show $80 for VBS expense, $55 for Sunday School Supplies expense, and $135 paid from your checking account.