I use accrual accounting for my sole prop. and file on Sch. C. A significant amount of the 1099K I received is not recognized revenue for 2016 (made to order items in production and not yet shipped to clients). I know the 1099K is essentially cash basis.
Is it recommended to report all 1099K earnings and then a Misc. Expense specifying the amount of deferred revenue in TurboTax Home and Business, so that my net income matches my accrual-basis accounting records? Or should the actual 2016 sales revenue only be reported (doesn't seem wise if the 1099K number is a lot bigger)? Or another option? Where should it be specified on my return that much of the 1099-K is deferred revenue, if anywhere?
