Need help fixing money that got put into "unapplied cash payment income"

[JetCityWoman]

Hi Guys,
I do my own bookkeeping using the bare-bones subscription level of Quickbooks Online. I originally had one "sales" and one "wholesale purchases" (COGS) account. In March I realized that, since my business is a combination of drop-ship and inventory sales, lumping it all together like that makes it hard for me track the value of my in-house inventory. So I split the two accounts and fixed a few invoices that needed it.

So now I have under the gross reciepts category of the P&L: "Inventory Sales" and "Dropship Sales". And under the COGS category I have: "wholesale purchases" and "dropship purchases". Good as gold.

However, I just noticed in my latest P&L that I have some money showing up in the "unapplied cash payment income" account. It's the invoices that I thought I fixed a few weeks ago. I check and the invoices look fine, so I tried to fix it with a couple of journal entries: debit unapplied cash income $60 and credit inventory sales $60

All I managed to accomplish was to move the money from one month to another, so I'm pretty confused. What am I missing?

 

[Nora]

Hmmm is the account a debit balance or credit balance? To reverse a transaction, you would use the opposite entry of the one you originally used (crediting the account with a debit balance and debiting the account with a credit balance).

I'm not sure but I think you should delete the transactions you made to reverse the original transaction. And then enter the new journal entries, debiting and crediting the correct accounts. If you want to remove a transaction from the sales account, for example, you would debit sales (since sales has a credit balance i.e. it increases with a credit) and you would credit the cash account to remove a cash transaction. Since this is an adjusting entry, you also need to debit and credit the correct accounts (for example, debiting dropship purchases expense and crediting dropship sales.)

Let me know if the above helps you correct the entries.

Do you use sales invoice option on the menu bar or the general journal to record sales and reversing entries?