To record a customer credit in QuickBooks, which sequence of actions is correct?

• A. Use job lists and either invoices, sales receipts, or statements; select Refunds and Credits on the home page; refund by check or apply the credit to an invoice or statement.
• B. Create a new customer and issue a credit memo.
• C. Enter a vendor credit and apply it to the customer balance.
• D. Simply increase the customer's balance on their statement.

Answer: (A)

Recording a customer credit involves creating a credit that reduces what the customer owes, then choosing how to settle it. The correct approach is to locate the customer and use Refunds and Credits to generate the credit, then either issue a cash refund (by check) or apply the credit to an open invoice or to the customer’s statement. This keeps accounts receivable accurate by tying the credit to the customer and to a specific invoice or statement.

A new customer isn’t required to issue a credit, and a vendor credit applies to suppliers, not customers. Simply increasing the balance on a customer’s statement would increase what they owe, not record a credit.