For purposes of this Guide, you exchange inventory when either:
and no credit is involved in the transaction. That means:
In other words, an exchange occurs when all movement of funds and inventory is accomplished in a single transaction. If the items exchanged are not of equal value, movement of funds can be via bank or cash transaction.
Conceptually, a customer exchanging inventory is equivalent to you buying back the item(s) the customer originally purchased and selling the new item(s) to the customer. In fact, you could enter two separate transactions. But there is a simpler way that produces identical results.
In either the Bank Transactions or Cash Transactions tab, click on New Bank Transaction or New Cash Transaction and select Spend money:
On the payment form, list all inventory items the customer is returning and their quantities. Include any tax code that was applied to the original sale.
Next, list all inventory items the customer is buying in the exchange and their quantities. Because you are effectively receiving money for the replacement item(s) rather than paying, enter the replacement quantities as negative numbers. Again, include any applicable tax code.
Click Create to record the exchange.
When you exchange inventory with a supplier, you are effectively selling back the items you originally purchased and buying replacements. The procedure for recording the transaction is basically the reverse of the one described above: