This is exactly how it SHOULD work, and always has in both prior desktop versions of QuickBooks and in QBO. I recently had a client upgrade to desktop 2021 though, and this feature is ALL MESSED UP. It seems that when you create an item that uses A/R as it's source and targets a Balance Sheet account (like the security deposits payable account we use to collect/track security deposits for short term vacation rentals) it insists on treating those items on the Accrual Basis (and only those items, any item set up to target a P&L account is fine.) So, if I create an invoice on May 1st because a vacationer arriving July 4th owes $2400 for their week's rent and a $500 security deposit, it posts the $2,400 rent on the cash basis (posts the date the invoice gets paid) but posts the security deposit on May 1st (Crediting the liability and debiting A/R). It doesn't matter if you run your Balance Sheet on the Cash or Accrual Basis, this is how it handles it. Which makes it really hard to design controls so that we don't accidentally return a security deposit that was BILLED but never received from the customer!
