Thank you Rainflurry. That makes sense to me. You are correct that this process is actually deducting expenses from my accounts. By linking this billable item to an expense account I believe I've dropped the income portion of the accounting balancing process. Everything billed to a tenant should be considered income to me (even if it is something I've paid for) in order to accurately reflect dollars coming into the business (I'm actually making money from the security deposit liability account). Then, when I pay the expense I incurred, that payment will show as a business expense and lower the income side.
.... Does this thought process make sense and sound correct?
I believe my next step should be to correct my item list by linking all the billing items to "rental income." However, since I've used the expense item on several other invoices, I should probably make that item inactive, and create a new item linked to the rental income account?
