Non-refundable deposits are treated differently than refundable deposits and are actually fees. These rental property deposit items must be accounted for properly.
Non-refundable deposits (e.g. pet deposits) are actually fees and are recorded as income when they are received. This differs from refundable deposits that are kept by the landlord upon tenant moving out. These deposits remain as non-income items until that time that it is determined whether or not the landlord needs to keep them (due to damage, extra cleaning, etc.).