What is Cash?

Cash (Definition)

The term cash in accounting is considered the most liquid asset of any business. It is very important in the short term for the solvency of the business and available for any expenses used in the day-to-day running to maintain the business. For any business, cash includes not only traditional notes and coins but also includes other currencies as well as any undeposited cheques or money orders, plus all deposits currently in all business cheques and savings bank accounts.

The cash balance for the business is recorded on the top of the balance sheet as a current asset as it shows what is available for the business in order of liquidity.

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