In which situation would you use the Add funds to this deposit grid?

The Add funds to this deposit grid is specifically utilized when you are receiving funds that need to be recorded as a deposit. This includes instances like tax refunds, where you are acknowledging that money is coming into the business from an external source, such as the IRS. By entering this information into the deposit grid, you ensure that the company's financial records correctly reflect the incoming funds, increasing the cash balance appropriately.

In contrast, issuing a refund to a customer involves reducing the cash balance, thus not requiring this grid. Paying vendor invoices and recording employee expenses relate to expenditures rather than deposits, making them irrelevant for the Add funds to this deposit grid as well. Therefore, the situation where you receive a tax refund from the IRS is the correct context for using this specific function in the accounting software.