Angie In: Category - Accounting OthersThe balance of petty cash book is an asset or income?assetincomepetty cash book ShareFacebook1 AnswerVotedRecent Dheeraj 2020-08-25T20:41:42+05:30Added an answer on August 25, 2020 at 8:41 pm This answer was edited. Balance of Petty Cash Book-The balance of petty cash book is an asset and not income. The logic behind the answer is that petty cash book is one of the types of cash book and petty cash book records expenses and incomes which is similar to cash book. Since cash account is considered as an Asset, petty cash book which is a part of cash book is also an asset.The balance of petty cash book is never closed and their balances are carried forward to the next accounting period which is considered as one of the most significant qualities of an asset whereas Income doesn’t have any opening balance and their balances get closed at the end of every accounting year.Petty cash book is placed under the head current asset in the balance sheet. The Closing Balance of petty cash book is computed by deducting Total expenditure from Total cash receipt (as received from the head cashier).To make the above explanation and logic easy. I would like to add a practical example for clear understanding.Example ProblemPrepare Petty Cash Book of Alex & Max Co. from the following information as provided belowDate ParticularsAmount1st AugReceived cash from head cashier5,0004th AugPaid Cartage expenses3008th AugTelephone charges paid20010th AugPaid Sundry expenses500 Petty Cash Book of Alex & Max Co.ConclusionI would like to conclude my answer by stating that the balance of petty cash book is an asset and not income.0Reply Share ShareShare on FacebookShare on TwitterShare on LinkedInShare on WhatsAppLeave an answerCancel replyYou must login or register to add a new answer.