I'm new to QuickBooks and need assistance accounting for item returns. Here's an example of what I'm struggling with:

Let's say that on 5/27 I purchased an item at Home Depot for $10 which I assigned to a COGS category. My total expenses on the "Expenses" screen was $1,000 at that point. The next day, I returned that item to Home Depot. A few days later, I download bank transactions and this return/deposit shows up. I assign the deposit to COGS in order to offset the initial purchase on the P&L. However, this transaction does not show up on the "Expenses" screen. Instead of showing total expenses of $990, I'm still showing expenses of $1,000, which is not an accurate representation of my expenses, even though the P&L DOES balance.

I searched the Web and found that it is possible to assign the bank deposit to Accounts Payable (instead of COGS). Then, create an expense or check on the Expense screen and attach the deposit to it. This creates a credit transaction on the Expense screen. However, when I look at the chart of accounts, the whole thing is done via the Accounts Payable account. The initial $10 I charged to COGS is still sitting there. The Expenses screen balances, but the P&L does not.

What am I missing? Is there a way around this? For those of you who charge your rehab expenses for flips directly to COGS, how do you handle item returns to ensure they are appropriately reflected on the Expenses screen?

Thanks for your help.