Understand whether cash is an asset or liability in accounting and how to disclose cash on the balance sheet.
Updated 21 December 2021
Friendly Disclaimer: Whilst I am an accountant, I’m not your accountant. The information in this article is legally correct but it is for guidance and information purposes only. Everyone’s situation is different and unique so you’ll need to use your own best judgement when applying the advice that I give to your situation. If you are unsure or have a question be sure to contact a qualified professional because mistakes can result in penalties.
1. Is Cash an Asset?
2. Is Cash a Liability?
Cash is a liability when there is a negative cash balance at the balance sheet date. In other words, the bank account is in overdraft meaning money is owed to the bank. Bank overdrafts are disclosed on the balance sheet within creditors due within one year.