MadelynC,

Thanks for your answer

But is it not related to the issue i described.

The issue is- 

 any of these Sales forms (invoice, sales receipt, credit memo) created in the system with the Services you described (with the liability type of account instead of income)  ARE included in all SALES reports.

It means that this Advance payment invoice (or retainer invoice) is displayed in Sales Reports (Sales by Customer, Sales by Location, etc)

And it is NOT correct.

Because the invoice is not related to revenue. Revenue for rendered services. It is just customer advance payment or Unearned revenue.

When this invoice is created the following accounting records are generated

Dr Accounts Receivable Cr Unearned revenue (Liability type) of account

So why the system includes the transaction which is not related to Sales (Revenue, Income) to Sales Reports?

Please note at the same time if you Run a Profit and Loss statement for the same period there won't be any Revenue in the statement.

And the transaction can be found only in Balance sheet.

And this is correct because A/R asset type and Unearned Revenue Liability type of accounts only categories associated with the transaction.

But why this is included in Sales reports then?? if there is not Revenue type on the transactions in the sales form?

Thanks for articles you provided but they don't answer the question i posted.

How to avoid the situation and avoid including customer retainers invoices in Sales reports.

They just give the guide how to create the invoices and that is all.