How to record tips

[Floyd Hagen]

Got it. Thanks for you help, Derek and Tristan


On Sun, Apr 11, 2004, Tristan Chase wrote:
> 
> On Sunday, Apr 11, 2004, at 15:16 America/New_York, Derek Atkins wrote:
> 
> >
> >You've got it backwards.. You want to pull money OUT of the
> >income account and deposit it into your checking (or cash)
> >account.
> >
> >
> >In this case you can just have two transactions:
> >
> >I:WS:T -> Assets:Cash
> >I:WS:S -> Assets:Checking
> >
> >Do all the entering from the asset accounts and the direction
> >will make sense, because you can see whether the money is coming
> >into or going out of the asset account.
> >
> >
> >-derek
> >
> 
> Floyd,
> 
> I've been in the restaurant business for many years. While it may seem 
> confusing that your wife's tips show up on her paycheck only to be 
> subtracted right out again, it is the standard way to account for that 
> money for tax purposes. Your guess is right.
> 
> I have used the setup that Derek suggested for years (previously on 
> Quicken and on a bunch of linked spreadsheets before that). Account for 
> the cash tips in the Cash account and in the transfer column put 
> Income:Wife Salary:Tips. If you deposit any of that cash into your 
> Checking account, then that transfer is from your Cash account to your 
> Checking account. Any money she makes on that actual paycheck should go 
> into the Checking account (Income:Wife Salary:[Paycheck or whatever you 
> want to call it]). This way you can track the tip income, where the 
> cash actually goes and any transactions involving your checking 
> account. I hope this clarifies the tip thing. Restaurant accounting is 
> a dark art among dark arts...
> 
> -Tristan Chase
>