QB Issue Resolution:

We can simply deposit the whole $1050.00 then create a check or expense to reduces your bank’s balance and zero out the customer’s overpayment. You can refer to this link in creating a deposit: Record and make deposit.

Once done, we’ll have to record the refund for your customer:

  1. Click the + New icon.
  2. Select Check or Expense.
  3. Select the customer you want to refund from the Payee ▼ drop-down.
  4. From the Payment account drop-down, select the bank account where you deposited the overpayment.
  5. From the Payment method drop-down, select Cash.
  6. In the Category column, select Accounts Receivable.
  7. Enter $50 in the Amount field.
  8. Click Save and close.

Then, let’s link the refund to the customer’s overpayment:

  1. Click the New icon.
  2. Select Receive payments.
  3. Choose the same customer you used for the check or expense.
  4. Enter the necessary information
  5. Under the Outstanding Transaction section, tick the checkbox for the expense or check you created.
  6.  Hit Save and close to complete the process.

I encourage you to read this article that will guide you in recording a refund for goods or services: Record a customer refund.

If you want to track the refund receipts that you’ve processed for the year, you can follow the steps below in customizing the Transaction List by Customer report to show all the refunds:

  1. Select Reports from the sidebar menu.
  2. Enter Transaction List by Customer on the search bar.
  3. Click Customize.
  4. Set the desired report date.
  5. Under Filter, choose Refund from the Transaction Type drop-down.
  6. You can select a specific customer on the Customer drop-down.
  7. Hit Run report.

Resolution for Issue 'How do I record a CASH refund to a customer’s account whose invoice was paid by check? – customer account has an open invoice for $1000.00 – a representative for the customer account is sent to pick up the order with a check for the incorrect amount of $1050.00 and does not have the time or desire to go back to their office to have a new one created – i refund him/her $50.00 cash – how do i deposit the check and show a cash refund so that the customer account balance is at ZERO?' available: Yes (Solved).
Source: Intuit Community forum.

How do I record a CASH refund to a customer’s account whose invoice was paid by check? – customer account has an open invoice for $1000.00 – a representative for the customer account is sent to pick up the order with a check for the incorrect amount of $1050.00 and does not have the time or desire to go back to their office to have a new one created – i refund him/her $50.00 cash – how do i deposit the check and show a cash refund so that the customer account balance is at ZERO?: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.

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