One of the things I get asked the most has to do with our family room sofa. It is actually a full sized bed turned sideways and converted into a multi-purpose piece. It was a simple/functional way for us to make something that works in our front room which currently serves as an office, playroom or guest bedroom.
To make it look more like a sofa, I went ahead and bought an IKEA slipcover for around $50.00. I stuffed the top cushions with some polyester stuffing and random extra bed pillows I had lying around the house. Since the bed is pushed up to the wall they just lay across that wall for support.
I bought bolster pillows as large as I could find them to make the arms. You could cover these with any matching fabric. To keep the couch cohesive, I continued to cut up the slipcover and used the arm sections to sew covers for the bolster pillows. I found that file cabinets were perfect for side tables and tall enough to hold the bolsters in place.
I kept a simple bed skirt and fitted sheet on the mattress To make it less obvious that it was a bed- I covered it in linens and blankets.
To finish it off I just layer on many pillows and textures. This bed/couch is perfect for the occasional house guest but mostly serves as a comfy sofa for the majority of time. For less than$100.00 I have a piece that is both useful and affordable.