When a customer pays by Paypal I have asked for a £2.00 card handling fee added, the Moneys are showing up as Unallocated payment how do you allocate to a account
How you handle this is up to you.
Some users edit the original invoice and add the charge on (then Log Payment and pay from credit). Some users issue a new invoice at the end of the month with the fees bulked up.
Generally you can add these against a misc line on the invoice, or you can create a new nominal code for card fees