What is the purpose of the offsetting transaction when deleting a customer with a balance due?

• A. It offsets the receivable with a corresponding transaction
• B. It creates a credit memo
• C. It permanently deletes the balance without notification
• D. It creates an excessive liability

Answer: (A)

The key idea is that deleting a customer who owes money doesn’t erase the debt; QuickBooks creates an offsetting transaction to zero out the receivable by posting a corresponding entry to another account. This keeps the general ledger balanced and preserves an auditable trail of the write-off or reclassification. For example, the system might debit an expense or allowance account and credit Accounts Receivable for the amount due. This is why the purpose is to offset the receivable with a matching transaction. Credit memos are for returns or allowances, not for deleting a customer; and the balance isn’t simply erased or turned into a liability.