"The
linking of the deposit to the vendor credit, shouldn't that be a
NON-posting transaction"
You got Real Money. That needs to Post as part of banking.
"or if it does create a journal entry"
Never use JE for AP or Banking. You don't use JE when Names are involved, and you don't use JE for anything where the program already has tools. You have Banking tools and Vendor Tools. And using a JE for AP means you just broke "cash vs accrual basis" reporting.
"To
summarize: VC: dr A/P, cr Exp."
No.
"Bank Deposit: dr Cash cr A/P"
No.
Learn to use the Tools that are provided.
If you got a refund and enter that as a Deposit, such as returning a bad toner cartridge = Office supplies, you realize, Hey, I cannot use my product/services here, or track that it relates to a specific customer name. So, when you need to enter More Info, such as returned Inventory products or got a refund for Services rendered, and might also want to track Customer name, that is why you start with the Vendor Credit.
And if you used Vendor Credit, you already created negative AP. That means the Refund is Debit Bank and Credit AP; which means using the Deposit screen, to show the deposit of the refund check is AP for that vendor name. That is why you then can link the refund to the available credit, in the Bill Payment function.
"Otherwise it would be creating a negative balance for AP again"
The Deposit, posting as AP, shows as if this is Bill to be paid; that's why you can link the earlier Vendor Credit to that deposit. That closes out the AP for that name.
