My bank deposit from my processor is negative. How do I clear this from my QuickBooks Online Undeposited Funds Account?

If you run into the scenario in which you actually have a negative deposit (a banking debit/withdrawal from your account) by your merchant  services processor, you will need to move the expected deposit from the Undeposited Funds account to your Bank Account via a journal entry.   This can happen in the event you have a large credit card refund that exceeds your new credit card sales on a particular day.

The following is the suggested resolution from QuickBooks.

1. Choose Plus Sign (+)> Journal Entry.
2. Set the Date of the transaction. 
3. On the first distribution line of the Journal Entry:
   1. In the Account column to Undeposited Funds.
   2. In the Debit column to the amount of the deposit. 
4. On the second distribution line of the Journal Entry:
   1. In the Account column to appropriate bank account.
   2. In the Credit column to the amount of the deposit. (Note: You are already accounting for the negative by crediting the bank account.)
5. Click Save. This will show a deduction from the bank account.

Next, you will want to group the Journal Entry with the payments to create a $0 deposit and remove the payments from Undeposited Funds. 

1. Choose Create (+) > Bank Deposit.
2. Select the payments and the Journal Entry you just created (the total should be zero). 
3. Click Save.