Thanks for following on this thread, @LW2.

Based on the details provided, record the uncollectible customer transactions using the bad debt process. This ensures your accounts receivable and net income are up to date.

You can also use this method for accrual accounting. Since there were transactions recorded as credits, I recommend consulting with an accountant for further assistance.

They can provide recommendations on how to properly input them in QBO. This way, it will not throw off your records.

If you’re using the online version, follow the steps provided by @Jovychris_A above. For QuickBooks Desktop, let me show the process.

1. Go to the Lists menu to choose Chart of Accounts.
   
2. Scroll down to the bottom of the page and click the Account drop-down to select New.
   
3. This will open another window where you can continue setting up the account.
4. Mark the radio button for Expense and then tap the Continue button.
   
5. Enter a term that will identify the entry in the Account Name field, for example, Bad Debt.
   
6. Press Save and Close to keep the changes.

You’re now ready to close the bad debt. To accomplish this task, follow the recommended steps in this article and proceed directly to Step 2: Write off bad debt in QuickBooks Desktop.

Let me know in the comment section below if you need further assistance. I’m always ready to help you. Have a good one.