credit and debit on trade debtors at same time

Question

Hi,

I am trying to allocate a small overpayment amount from previous year. And I followed the instructions to record a new invoice for the overpaid amount, then apply a credit to this invoice to close it. However, the transaction journal makes me confused after I close the invoice. The journal showed the amount credit and debit on trade debtors at same journal.

As shown as the picture below,

is it correct?

Earl_HD · Accepted Answer

Hi @EthanGao,

It seems like you're on the right track, but the confusion with the transaction journal could be due to the way the system records the allocation of the credit.

When you record the overpayment as a new invoice and apply the credit, the system will create a journal entry showing both a debit and credit to the Trade Debtors account. This is normal because:

* The debit reflects the reduction of the customer's outstanding balance when the credit is applied.
* The credit shows the allocation of the overpayment to the invoice.

In essence, both transactions are balancing each other out within the Trade Debtors account, which is why you see the same amount debited and credited. So yes, the entry you're seeing in the journal is correct, and it indicates that the invoice has been closed properly.

If you're still unsure or if the amounts aren't matching up, it may help to double-check the initial overpayment and ensure the credit was applied correctly.

You can also refer to the help page on customer returns, credits, and refunds here: Customer returns, credits and refunds

Regards,
Earl