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  • Cash 3

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    Zyrene Yanez
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    Cash refers to bills, coins, bank balances, money orders, and checks that can be used to acquire goods and services or pay obligations. It is the most liquid asset, listed first on a company's balance sheet. While most transactions are now electronic rather than physical bills and coins, cash includes bank balances that can be accessed instantly. Related terms include cash equivalents, which are assets that can be quickly converted to cash, and whether a business needs to keep large cash reserves depends on if it deals primarily in cash transactions or can forecast cash flows well to invest in less liquid assets.

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    Cash refers to bills, coins, bank balances, money orders, and checks that can be used to acquire goods and services or pay obligations. It is the most liquid asset, listed first on a company's balance sheet. While most transactions are now electronic rather than physical bills and coins, cash includes bank balances that can be accessed instantly. Related terms include cash equivalents, which are assets that can be quickly converted to cash, and whether a business needs to keep large cash reserves depends on if it deals primarily in cash transactions or can forecast cash flows well to invest in less liquid assets.

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    4 views1 page

    Cash 3

    Uploaded by

    Zyrene Yanez
    Cash refers to bills, coins, bank balances, money orders, and checks that can be used to acquire goods and services or pay obligations. It is the most liquid asset, listed first on a company's balance sheet. While most transactions are now electronic rather than physical bills and coins, cash includes bank balances that can be accessed instantly. Related terms include cash equivalents, which are assets that can be quickly converted to cash, and whether a business needs to keep large cash reserves depends on if it deals primarily in cash transactions or can forecast cash flows well to invest in less liquid assets.

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    © All Rights Reserved
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    What is Cash?

    Cash is bills, coins, bank balances, money orders, and checks . Cash is used to acquire goods
    and services or to eliminate obligations . Items that do not fall within the definition of cash
    are post-dated checks and notes receivable. Most forms of cash are electronic, rather than
    bills and coins, since cash balances can be stated in the computer records for investment
    accounts.

    Cash is listed first in the balance sheet , since the reporting sequence is in order by liquidity ,
    and cash is the most liquid of all assets. A related accounting term is cash equivalents ,
    which refers to assets that can be readily converted into cash.

    A business is more likely to retain a large amount of cash on hand if it routinely deals with
    cash transactions (such as a pawn shop), and is less likely to retain much cash if it has an
    excellent cash forecasting system and can therefore invest in more illiquid but higher
    yielding investments with confidence.

    Cash is assumed to be stated at its fair value at all times.

    Credits to: https://www.accountingtools.com/articles/cash

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