Warranty items can be a problem in QB.

With warranty work typically …

1. you take back a part and issue a part immediately

• 1a. you fix the part you took back and return it to stock
• 1b. you trash the part you took back
• 1c. you return the part to the vendor for credit

QB does not make any of the above easy.

1. you take back a part and issue a part immediately

Create a sales receipt put the part on it that is good, then put the same part on it again that is bad but use a negative 1 as the quantity. That results in a zero price sales receipt. I would either use a class and tag the receipt as warranty exchange, or at least put that information in the memo block.

Now you have a bad part in inventory. Create an expense account called warranty-work.

1a. you fix the part you took back and return it to stock
Bring up inventory adjust and select the warranty-work expense account as the adjusting account and lower the qty of the item by one.  That sends the cost of the item to the expense account and your on hand qty reflects parts that are ready for sale. If you use other inventory parts to repair the item, use the same adjustment procedure to move the cost of the inventory items used to the warranty-work expense account. If you spend money to buy repair parts use that warranty-expense account to record the expense.

Now the part is fixed and the total cost of the repair sits in the warranty-work expense account, write that total down. Bring up inventory adjust and mark it as a value adjustment, select the warranty-work expense account as the adjusting account.  Add the total that was in the warranty-work expense account to the old total value and enter it in the new total column, then increase the quantity on hand by one and enter it in the new quantity column.

That moves the cost of the repaired item and the quantity back to inventory.

1b. you trash the part you took back
The bad part is in inventory and you need to get it out. Bring up inventory adjust and select the COGS or the COGS-warranty expense account as the adjusting account. Lower the quantity on hand by one.

That removed the item from inventory and the cost went to the selected expense account. Trash the item.

1c. you return the part to the vendor for credit
Bring up Receive inventory with bill, at the top left select credit, select the vendor you will be retuning the bad part to, enter the part in the item list, save.  Physically send the part back to the vendor.

That removed the part from inventory and set a credit for the price of the part with the vendor.