Hello there, @Steven_ZA.

Let me add some information about recording a payment with the refund.

I understand you created an expense for the refund amount as advised by one of m colleagues above. However, an expense transaction will show in your Profit & Loss report in a positive amount.

I suggest you follow the recommended steps from Jovychris_A. You can delete the expense transaction and record the refund in a negative amount when adding a Deposit.

I'm also adding this article as your reference in reconciling an account: Reconcile and account in QuickBooks Online.

If you have any questions about recording the refund amount of the payment received, let me know in the comment section. I'll be glad to share and provide further assistance.