A deposit is typically canceled when the customer does not proceed with the purchase of the stock item.
Whether the deposit is refunded depends on legislation in your state. Some states provide for a maximum deposit amount that can be retained by the dealer, and the balance if any is refunded to the customer.
If the deposit is canceled before it has been banked, the deposit can be simply deleted as if it never happened. If it was banked however it must be retained as a banking transaction, but removed from the stock card.
You can download instructions here
Cancel a Deposit from the stock card
Open the Settlement tab of the stock card and open the Deposit field. Locate the Receipt entry within the Receipt History pane, and click Cancel Item. At the prompt, determine whether the deposit money has been banked or not, and answer accordingly. If a Further Deposit exists, repeat this step. |
If you answer No, the deposit wasn't banked, then it is assumed you will returned the money to the customer. The Deposit transaction will be deleted entirely. |
Deposit not banked, but retaining $$
If you are retaining some or all of the deposit amount, then you must respond as if the deposit was banked, and answer Yes. See entry on Retaining Deposit. |
Answer yes. The deposit will be removed from the stock card, and a General Journal created to move the $$ from the Deposits Taken account to the Non-Delivery Refunds account. From here, you can allocate a payment to the customer for a full or partial refund, or alternately retain the entire deposit. See entry on Retaining Deposit. |
In order to retain any or all of a deposit transaction, the deposit must first be Canceled from the stock card, and you must indicate that the deposit has been banked. At this point the entire amount will be transferred via General Journal entry to the Non-Delivery Refunds account. To refund a partial amount to the customer, create a Cash Payment entry to the customer, and allocate the first line item to the Non-Delivery Refunds account for the full deposit amount with a Tax Code of GNA. Tab to the next line and allocate it to the Retained Deposits Other Income account, and enter the amount that is being retained as a negative amount with a Tax Code of GST. The balance of the Cash Payment transaction is the amount being paid back to the customer. To retain the entire amount and refund none, create a Cash Payment entry to the customer, and allocate the first line item to the Non-Delivery Refunds account for the full deposit amount with a Tax Code of GNA. Tab to the next line and allocate it to the Retained Deposits other income account, enter the full deposit amount as a negative, with a Tax Code of GST. The Cash Payment entry will have a net total of Zero. |