It's nice to hear again from you, @S-Ponder.
A sales receipt is used to record your customers' immediate payment and you've received the payment in full. Also, you can apply upfront deposit or retainer as payment on the invoice. This moves the deposit from the liability account to your income account.
I can see in here that you have a related post about tracking and applying prepayments in QuickBooks. I'd recommend following the steps provided in this thread: https://quickbooks.intuit.com/learn-support/en-us/reports-and-accounting/re-generally-you-should-recognize-income-when-you-have-a-sal/01/405102#M42138.
You can also check this article for more detailed instructions: Manage upfront deposits or retainers.
Meanwhile, the sales tax liability report summarizes your sales tax liability (the sales tax you've collected and currently owe to your tax agencies. It includes only those statement charges you entered while sales tax was turned on. If the sales transaction you're using is non-taxable but the specific line item included on it is taxable, you'll still it listed in your sales tax liability report.
I'd suggest consulting with an accountant or a tax-professional for other options in tracking your sales tax.
Feel free to leave your comments below if you have other questions. I'm always here to help.
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I appreciate hearing again from you, @S-Ponder.
When depositing prepayments, it should be associated to a liability account. Let me show the workflow to you.
To create a liability account, here's how:
Go to the List menu.
Choose Chart of Accounts.
From the Chart of Accounts window, click the Account drop-down.
From the Other Account Types drop-down, select the Other Current Liability account.
In the Add New Account window, enter the name of the account (i.e. Prepaid Customer).
Click Save and Close.
Once completed, you can now deposit the prepayment. Now, let's create a prepayment service item and use it in recording the credit memo.
Also, we have to make sure to associate the service item to the liability account. By doing so, the “Prepaid Customer” account will show a 0 balance.
From here, you'll see your Open Accounts Receivable will have a credit balance on it. Also, the entire process ensures that when you convert the estimate to invoice it will be considered a liability, not a sale.
Feel free to click the Reply button if you have other questions. I'm always here to help.
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I have answered this same question on a different thread you posted. You can check it out via this link.
You're welcome to post a reply in case you have other questions in mind. I'll be sure to get back to you.
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