So here is my understanding and what I do. Your daily journal entry records menu items as a credits to (pizza, beer, sandwiches, etc). and a debit to (bank acct, cash on hand). Sometimes your cash on hand will go negative because your credit card tips exceed your cash collected. This would give you a negative cash received so that is impossible to deposit a negative amount. Weird but it happens all the time. Let's say you have four customers each ordering $25.00 worth of food. Customers A, B, C D all order same item(Pizza). Your tips are received as follows (A-$5 CC tip), (B-$5 CC tip), (C-$5 CC tip) & (d-$5 Cash tip).
CC-Tips $15.00
- Cash Tips $5.00
- Journal Entry(s):
- To Record Daily Sales and funds received
- Debit: Bank acct $115
- Debit: Cash on Hand $5
- Credit: Sales Pizza $100
- Credit: Tips Payable $20
- To Record Tips paid
- Debit: Tips Payable $20
- Debit: Cash on Hand $20
