When saving transaction, you see the following message:
Warning: You cannot use more than one A/R or A/P account in the same transaction.
QuickBooks will not let you record transactions that contain:
When you are recording bad debt in accrual method, you need an Allowance for Bad Debts account.
To avoid or fix the error, you need to setup the Allowance for Bad Debts account as Other Current Asset. If you want to set it up with the normal Accounts Receivable type, you need to use a clearing account as go-between for the two A/R accounts when recording journal entries.
If you have a customer who is also a vendor, you may need to write off a receivable against a payable. You cannot do this in a single transaction since that transaction would have an A/R account and an A/P account. You need to use a clearing account and make two transactions.
If you have multipe A/R or A/P accounts and you recorded a transaction to the incorrect account, you need to correct the original transaction or create a journal entry to a clearing account and enter a second journal to move it to the correct A/R or A/P account.
As it technically leads to using two A/P accounts in a transaction, you may also get the warning message when you set up QuickBooks to automatically prefill accounts for a vendor and you choose Accounts Payable as the default account. To prevent this problem, remove A/P from the vendor's Account Settings and make sure to only use expense accounts for the vendor.