Petty Cash

This Current Assets code records petty cash. As an asset account, it normally carries a debit balance: debit entries increase the balance and credit entries decrease it.

Real-world examples

Retail and hospitality

A café or shop tops up a petty cash tin regularly for small everyday purchases — milk, cleaning supplies, parking, a top-up float for change — with each payment backed by a receipt and reconciled against a petty cash book. Turnover through this account can be surprisingly high relative to its balance, since it's topped up from the bank as it's spent down.

Office-based B2B

A consultancy or agency paying everything by card or bank transfer often barely uses this code at all — a nominal float of £50 might sit untouched for months, kept mainly for the rare occasion someone needs to reimburse a small cash purchase. For many office-based businesses, it's realistic for this balance to stay essentially static all year.

Trades and site-based work

A construction or trades business often needs genuine cash on site — for parking, small tool purchases, or paying for something where a card machine isn't practical — so this float gets used more like a retail business's than a typical office's, even though the underlying business is B2B.

Commonly confused with

Because code 1235 (Cash Register) sits right next to this one in Current Assets, it's a common mis-posting target. Code 1230 is specifically for petty cash, while 1235 covers cash register — similar in nature, but keeping them separate is what makes the current assets section of your management accounts meaningful rather than a single lumped total.

What a mis-posting here costs you

Because Petty Cash sits within Current Assets, an error here overstates or understates working capital on the balance sheet rather than affecting reported profit — it won't move the bottom line, but it can make the business look more, or less, liquid than it actually is.

Other codes in Current Assets