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Petty Cash from Client

BSProductionsBSProductions Member Posts: 2

I have a client that gave me a lump sum of petty cash to purchase items for a project. I deposited the cash into my main business bank account and used it for purchases. At the end of the job, I returned the leftover. What is the best way to account for this? The initial deposit isn't actually "income" and the purchases aren't actually "expenses". However, I do need to keep my books straight in my bank account so I don't want to just not record them at all.

Any suggestions?

in Accounting Technical Support

Comments

  • MikegMikeg Member Posts: 995 ✭✭✭

    @BSProductions,
    Can only speak from a US perspective, but it is income and should be recorded that way. You should also record the expenses. In addition, the return of "leftover" is an expense as well.

  • BSProductionsBSProductions Member Posts: 2

    Thanks Mike! I guess that does make sense and will come out in the wash in the end. I just didn't want to record expenses that I technically didn't pay for. But if counting it all as income/expense then that works.

  • MikegMikeg Member Posts: 995 ✭✭✭

    Sure thing!

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