How do you handle a bounced check in QuickBooks Online?

Handling a bounced check in QuickBooks Online is properly addressed by creating a new transaction to record the bounced check and reversing the original deposit. When a check bounces, it's crucial to reflect this occurrence in your accounting records to ensure they remain accurate and to monitor your income correctly.

Creating a new transaction specifically for the bounced check allows you to document the exact amount and details of the bounced payment, including any fees charged by the bank. This action helps maintain transparency in your financial records. By reversing the original deposit, you reverse the effect of that income, reflecting that the funds are no longer available to you. This two-step process accurately represents the situation and ensures that your accounts remain balanced.

Other options, while they may seem plausible, do not provide a complete or accurate accounting of the bounced check situation. Simply deleting the original payment transaction doesn't address the need to record the fact that the payment was never received. Transferring funds from another account might address the cash flow issue temporarily but fails to acknowledge the need to correct the records for the bounced check. Issuing a credit note does not address the issue of the check bouncing, as it pertains to adjustments for returns or discounts on sales rather than documenting a non-collectible payment.