@ScriboDT 

Just to confirm, you're receiving prepayments and, instead of recognizing them as deferred revenue, you need to recognize them as income?  Let me know if I'm understanding that correctly.  You're on cash basis, yes?  A prepayment shouldn't go to an asset account because the cash received is an asset, so if you assign an asset account to the payment received, it will record a negative asset amount to offset the positive cash received.  

In QB Desktop, set up a Prepayment or Deposit Received Service/Other Charge item.  Select your desired income account under 'Account' in the item set up.  Then, assign that item to the invoice issued for the prepayment.  When you want to apply the prepayment to a future invoice, add the Prepayment/Deposit Received item to the invoice as a negative amount. 

This is one area where QB Online works better than QB Desktop.  In Online, you can just Receive Payment from the customer and, if there's no invoice issued for the payment received, it will automatically book the payment to income on cash basis.  The payment also remains as an A/R credit on accrual basis so you can easily apply it to a future invoice.