We collect project deposits (unearned revenue) from customers. I need these deposits to show on the Balance Sheet (which they do). The problem that I have is that the deposit item is also affecting sales. Some customers require an invoice for the deposit, so in order to do that, I have the deposit as an item, which shows up as non-taxable sales, which shows an inflated total sales for the month. Is there any way to have an item that does not affect my sales?
I'd like to share some information on how to setup an item that does not affect the sales.
When creating an item, you have the option to edit it. In your case, since you want the deposit item not to affect your sales, you can edit your item setup by changing the Income Account option. From there, you can choose an account and make sure it'll not affect the sales.
Here's how to modify an item:
Go to Lists on the top menu.
Choose Item List.
Select the item you want to modify.
Choose an account from the Income Account drop-down.
Make necessary changes.
If you're not sure which account to choose, I recommend consulting an accountant for proper guidance.