1000assetNormal balance: DebitBusiness & personal1000 — Cash
Open a cash drawer, a petty cash box, or a wallet full of bills set aside for the business, and you are looking at account 1000. It is the one account in the chart that means literal paper and coin — not a number on a bank statement, but currency you could physically hand someone right now.
Most people who set up a ledger never touch this account at all, and that is normal. If every dollar moves through a bank account or a card, Cash can sit at zero forever without anything being wrong. It only starts to matter once real money changes hands outside a bank: a cash sale at a job site, a stack of bills kept for small reimbursements, tip money set aside before it is deposited.
Cash is an asset, so it carries a normal debit balance: a debit (money in) increases it, a credit (money out) decreases it. Because it is not tied to any bank, nothing reconciles it automatically — the only way to know the balance is correct is to actually count what is in the drawer.
What belongs here
- physical bills and coins kept on hand, whether in a register, a safe, or a wallet reserved for the business
- a petty cash fund used for small reimbursements or incidentals
- cash tips or cash sales not yet deposited at a bank
- cash withdrawn from an ATM for a specific known purpose
What does not belong here
- the balance in a checking account, even though people casually call that money "cash" too — that is account 1010 Checking
- a savings balance — account 1020 Savings
- a customer check received but not yet deposited — that belongs in Undeposited Funds (1900) on the business chart, not here
- a credit card balance — that is a liability, account 2100, never an asset
Where it shows up
Appears near the top of the balance sheet under current assets, usually summed alongside Checking and Savings into a total cash position. A balance here should match what you could count by hand.
Common questions
- Do I really need a separate account for physical cash?
- Only if you actually handle it — a cash register, job-site payments, or a petty cash box. If everything runs through a bank or a card, this account can stay at zero indefinitely.
- What happens when I deposit cash from this account into checking?
- That is a transfer, not income: it debits Checking and credits Cash for the same amount. The income was already recognized when the cash was received, not when it hits the bank.