Cash: debit or credit?
Cash increases on the debit side and decreases on the credit side: its normal balance is a debit.
Assets are resources the business controls. They increase with a debit.
Name in each convention
Account names and codes follow each convention; an account that does not exist in a convention is not offered there.
| Convention | Account |
|---|---|
| United States (US textbooks) | Cash |
| Spain (PGC 2007) | 570 Caja, euros |
| France (PCG 2025) | 53 Caisse |
| Germany (generic accounts) | Kasse |
Practice entries that use this account
- Owner invests cash to start the business
- Owner invests cash and a delivery van
- Receiving a bank loan
- Repaying the principal of a bank loan
- Paying a loan installment: principal plus interest
- Owner withdraws cash for personal use
- Issuing common stock at par for cash
- Buying merchandise for cash
- Buying merchandise, paying part in cash and the rest on account
- Paying a supplier’s invoice in full
- Paying a supplier within the discount period
- Paying freight on purchased merchandise
- Buying office supplies for cash
- Buying merchandise with a cash discount on the invoice
- Paying part of a supplier’s invoice by bank transfer
- Cash sale of merchandise (periodic inventory)
- Cash sale with cost of goods sold (perpetual inventory)
- Customer returns goods for a cash refund, restocked (perpetual inventory)
- Collecting a customer’s invoice in full, in cash
- Customer pays within the discount period
- Cash sales with sales tax included in the total
- Service paid for on completion
- Receiving a customer deposit before the service
- Sale paid partly in cash, partly on account
- Recovering an account previously written off
- Receiving rent for a van rented out
- Buying equipment for cash
- Buying equipment with a down payment and a note payable
- Buying equipment including freight and installation
- Buying equipment with sales tax, part paid and part on account
- Buying a plot of land
- Buying a building with a mortgage loan and a bank transfer
- Buying a delivery van with a bank loan
- Selling a machine at a loss
- Trading in an old delivery van for a new one
- Paying for an ordinary repair
- Paying the monthly rent
- Paying six months’ rent in advance
- Paying the electric bill
- Paying the month’s salaries
- Paying salaries accrued at year end
- Monthly payroll with withholding and employer payroll taxes
- Paying for advertising
- Paying an annual insurance premium in advance
- Bank charges on a wire transfer to a supplier
- Paying quarterly interest on a bank loan
- Reimbursing the owner for a business trip
- Paying income tax owed by a corporation
- Correcting an insurance payment recorded at the wrong amount
- Depositing the cash takings in the bank
- Withdrawing cash from the bank, with a fee
- Setting up a petty cash fund
- Replenishing petty cash after several small expenses
- Customer check returned NSF
- Bank collects a note receivable for the company
- Bank fee and interest found in a bank reconciliation
- Cash shortage found at the cash count
- Customer pays two invoices by one bank transfer, less a bank fee
- Collecting a note with interest
- Paying a note with interest at maturity
- Receiving a bank loan net of an arrangement fee
- Paying a loan installment: splitting interest and principal
- Lending cash to an employee
- Repaying a bank overdraft
- Paying freight-out on goods sold
- Returning damaged goods for a cash refund
- Purchase discount taken, reducing inventory
- Issuing common stock above par
- Paying a declared dividend
- Buying treasury stock
- Declaring and paying a dividend the same day
- Buying on account, returning part, paying the rest
- Credit sale, return, then payment within the discount period
- A machine bought, depreciated for a year, then sold