QB Issue Resolution:

the pre-payment account is a liability account

create a service item called pre-payment and select the liability account on the item screen

use that on an invoice to charge them

when you pay the advertising, use the expense account for advertising expense, follow that with the pre-payment item and enter the amount as a negative,save the zero dollar transaction

Resolution for Issue 'QBO user with tenants in a services business who want to prepay expenses. What is the appropriate setup for chart of accounts, invoices & apply actuals against payments?' available: Yes (Solved).
Source: Intuit Community forum.

QBO user with tenants in a services business who want to prepay expenses. What is the appropriate setup for chart of accounts, invoices & apply actuals against payments?: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.

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