QB Issue Resolution:

If you keep the books on the cash basis, then it’s income (either Sales Receipt or Invoice> Receive Payment) when you receive the money. But ideally you should not keep the books on the cash basis. You can always toggle from accrual to cash basis when you look at a P&L report, for tax purposes. One way is to record the prepayment with a Receive Payment which puts a credit on the customer’s account.  Then later on when service is provided, create an Invoice, which reduces the credit

Resolution for Issue 'recording a prepayment for services for cash based accounting' available: Yes (Solved).
Source: Intuit Community forum.

recording a prepayment for services for cash based accounting: 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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