Cash Basis P&L

income on the P&L is a credit entry.

Journal entries do not work as expected in QB for the most part and often do not show on reports. You need to use the software as designed.

Delete the journal entries, receive payments against the customer invoices and deposit. Then run your P&L

How would this affect months when the bank account is already reconciled?

Hello, afnjlawbk. 

First off, please know that two balances will be affected here. The account balance and the beginning balance of your reconciliation.  

Since your journal entries include your bank account, they will post to your bank register and affect the account balance, and will also affect the beginning balance of your next reconciliation. 

To know more about reconciliation in QuickBooks Desktop, check out these articles: 

• Reconcile hub
• Fix Reconciliation Discrepancies

Additionally, I've included an article that will guide you in ensuring all your transactions are organized in the correct account to avoid issues: Understand Chart of Accounts in QuickBooks. 

I'm more than happy to jump back on if you have any other concerns in QuickBooks, please let me know by adding a comment below. Have a good one!

Thanks so much for responding-this is very helpful.  So if I delete the journal entry from a prior month that was reconciled (which was debit cash/credit A/R) and then record the deposit in "receive payments" for the original date of receipt and allocate it to the invoice, my bank beginning balance of the next rec will be lower by the amount of the deposit. Then there will be a new transaction for the deposit recorded the correct way to check off in the rec.Is  that correct? Now this deposit will show up in the Cash P&L for the original month?  Again, I really appreciate your help.

When you made the journal entry (J/E) for the deposit, you must have debited your bank account and credited A/R, correct?  If that's the case, the J/E for the deposit will have no effect on the P&L because neither account on that J/E is a P&L account - they are both balance sheet accounts.

If you apply the credit from the J/E, you are just telling QB to associate those two transactions but nothing has fundamentally changed in regard to when income hit the books (still the invoice date) or when the deposit occurred (still the journal entry date).   So, to answer your question, if you apply the credit from the journal entry, it will have no effect on cash basis vs. accrual basis P&L reports. 

If you want QB to be able to accurately track cash vs. accrual basis, you need to receive the payment against the invoice and not use a journal entry.