Refund of $100 allocated to a payment

This table shows generated refunds when RFND Journal is specified:


Account	Value
Debit refund suspense account	100.00
Credit refund clearing/control	100.00

This table shows refunds generated when refund is apportioned to receipt:


Account	Value
Debit overpayment account	100.00
Credit overpayment bank account	100.00
Debit overpayment tax cash account	9.10
Credit overpayment tax clearing account	9.10
Debit refund bank account	100.00
Credit refund suspense account	100.00
Debit refund tax clearing account	9.10 (Uses the O’payment accounts)
Credit refund tax cash account	9.10 (Uses the O’payment accounts)

Note: Even if the receipt is not an overpayment, any debt is not allocated in the refund process and the receipt is forced into overpayment. The refund entries are then allocated to the overpayment.

As such, reactivation entries are generated reversing out the allocation entries and generating overpayment entries. This process caters for non tax and taxable debt transactions.

This table shows re-activation of a receipt to be refunded that was allocated to a taxable debt:


Account	Value
Debit control account	100.00
Debit tax cash account	9.10
Credit tax accrual reversal account	9.10
Credit bank account	100.00
Credit overpayment account	100.00
Credit overpayment tax cash account	9.10
Debit overpayment tax clearing account	9.10
Debit bank account	100.00

This table shows re-activation of a receipt to be refunded that is allocated to a non-taxable debt:


Account	Value
Debit control account	100.00
Debit tax cash account	100.00
Credit overpayment account	100.00
Credit overpayment tax cash account	9.10
Debit overpayment Tax clearing account	9.10
Debit bank account	100.00

The result is the same once it is in overpayments.

Effectively the final result of a refund, is a debit balance in the refund control account and the reversal of tax entries in cash accounts, but leaving a tax amount in tax accrual only where original debt was taxable that receipt being refunded was allocated.

Payment of refund cheques processed through accounts payable zeroes out the refund control account. These cheques must not generate any further tax.