Software: MoneyWorks accounting software
When overpayment is received from a customer, there is a temporary “overpayment” detail line added to the Receipt transaction. Example: when a customer made a payment of $10,900 for an outstanding invoice of $10,700, the overpayment of $200 is also credited to the Accounts Receivable account. In the Receipt transaction, the first detail line of 10,700 will be tagged to the invoice paid and the second detail line, which is the overpayment of 200.00, will not tag to any invoices.
The double entry for the receipt transaction is:
Debit the bank 10,900
Credit Accounts Receivable 10,700
Credit Accounts Receivable 200
In the subsequent receipt, MoneyWorks will prompt that there are surplus available. The user has an option of using the previous surplus or enters as a new receipt. If “Use Previous Surplus” option is opted, MoneyWorks will amend the previous overpayment receipt, update the overpayment detail line with the actual invoice paid.
Assuming you received 8,360 from the customer together with the overpayment of 200 for an invoice of 8,560. MoneyWorks will debit and credit 8,360 to the Bank and Accounts Receivable account respectively. Besides, this invoice will be tagged to the overpayment receipt as an actual invoice paid.