How to Record a Returned Security Deposit in QuickBooks
A reader wrote to find help with a problem. She takes security deposits from tenants, and posts them to an Other Current Liability account in QuickBooks. When she has to return the security deposit she issues a credit memo, and chooses the option to create a refund check. She says that each customer record shows multiple entries for these transactions.
A credit memo is a credit against currently owed balances (or is held, awaiting future invoices). That description doesn't fit the return of a security deposit, so it's an inappropriate transaction type. To return a security deposit, use the QuickBooks Write Checks window to write the check and post it to the Other Current Liability account.