how should you account for advanced deposits received on customers order ?

[armorales102]

how should i account for advanced deposits received on customers order ?

please help, i cant figure this out

[Joe Williams]

You can use Receive Payment and just leave the credit in the AR and apply it to the invoice when you enter it, or create a new Other Current Liability account named "Customer Pre-payments" and use the Make Deposit and enter "Customer Pre-payments" as the account and use the customer name. Create an item of Other Charge named "Customer Deposit" and set the income account to "Customer Pre-payments". On the invoice enter it as the last item and enter the deposit amount as a negative amount.