Income not applying to invoice

Thanks for dropping by, Black Ink Dan. Allow me to share some information regarding the cash and accrual basis in QuickBooks Online.

In QuickBooks Online, the business that's using the cash basis accounting records revenue when it’s received—say, when a check is deposited, clears and cash lands in the account—and expenses when a payment is issued.

While the accrual basis accounting income and expenses are recorded when they’re billed and earned, regardless of when the money is actually received. See the sample screenshot below:

To know more about these accounting methods, check out the following resources below. You'll find details about the advantages and disadvantages of these methods:

Cash vs. accrual accounting.

Resolve AR and AP balances on the cash basis Balance Sheet.

Let me know if there's anything else I can help you with. I'd be more than willing to lend a helping hand.

Sorry, my question is not about cash vs accrual. I'll try to rephrase:  the customer paid $12,000 which I recorded as an unearned liability. 1 month later created an invoice for $19,908, to which I applied the $12,000 unearned income, net invoice $7,908. Two weeks later customer paid $6,008, leaving $1,900 still due on the invoice. I have received and deposited $18,008 into the bank from this customer. Cash basis P&L for all dates says I have $15,124.84 income. What happened to the other $2,883.16?

Thanks for getting back to us, @Black Ink Dan.

The way QuickBooks reports transactions depends on how you enter them in the program. 
 

The cash basis of accounting records revenues when cash is received and expenses when cash is paid out. The accrual basis of accounting records revenues when they are earned, and expenses when resources are used.

The $2883.16 difference might be coming from recorded expenses and unpaid invoices. To track the discrepancy, customize the report's dates and filters. That way, you can check its differences. 
 

Here's how:

1. Go to Reports and open the Profit and loss report. 
2. Use a custom date in the Report period. 
3. Click Customize and filter the report. 
4. Select Run report. 

For additional help, reach out to your accountant. That way, they can review your P&L report and provide you with a further explanation. 

Moreover, you can check out this article to get the most out of your financial reports: Customize reports in QuickBooks Online.

Should you have any follow-up questions or concerns, don't hesitate to post again here in the Community or leave a comment on this thread. Take care and have a good one.