How do you apply a customer payment to an existing invoice in QuickBooks Online?

• A. Record a Deposit to the customer’s account.
• B. Edit the invoice to reflect the payment amount.
• C. Open Receive Payment for the customer, select the open invoice, enter the payment amount, and save to apply.
• D. Create a payment under Expenses and link to the invoice.

Answer: (C)

When a customer pays, you need to record that cash receipt against the correct invoice so accounts receivable and cash stay accurate. In QuickBooks Online, you do this by using the payment workflow: choose Receive Payment for the customer, pick the open invoice, enter the payment amount (full or partial), and save. QuickBooks then applies that payment to the invoice, reducing its balance and updating both AR and the bank/cash account. Editing the invoice to reflect the payment amount bypasses the actual payment record and can confuse the records. A deposit entry is for cash coming into the bank from various sources and isn’t linked to a specific invoice, and an expense is money paid out, not money received from a customer. If there’s more money than the invoice, QuickBooks can create a credit to apply later.