How do I account for owner tips?

Owner is a sole proprietorship and sometimes clients pay her tips in addition to her regular income for the services. Do I need to account for that differently or just as income to the business?

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  1. 74 Answers

    Hi yes, you can account for the tips as you would the regular income, if your client would like to keep up with the tips to see what part of her income is derived from tips you can set up a separate income account specifically for tips and record the tips to the GL account.

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