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Aug 25, 2018
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Accounting For Tips
by: Anonymous

Thank you for your question about how to account for tips and gratuities received and taken out.

When you receive tips it would be recorded as:

DEBIT BANK ACCOUNT
CREDIT TIPS INCOME

When you take tips out of sales that don't get deposited it would be recorded as:

DEBIT CASH DEPOSIT
CREDIT TIPS INCOME
DEBIT TIPS EXPENSE

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