Hello everyone.
I am new here and my name is Yvonne.
I need assistance on how to account for tips given to individuals who assist outside of your workspace eg the police and land leads.
I have created a liability account under current liabilities and allocated them to it but when I check the balance sheet it interprets that the total amount is owed to those individuals ( amount is negated).
Is it supposed to be so or am I missing something?
I hope my question is clear?
That means there is an overpayment.
You need to recognize expenses from accrued liabilities/liability account.
The account you created for tips should be a profit and loss account not a balance sheet account. Make the same account under expenses and allocate amounts to that account.
Also
that the total amount is owed to those individuals
Nope. If it’s under current liability with a negative sign that means they owe you like @Mabaega said until you make u make an expense and post it to that account.