Cash

Meaning:

Cash refers to money in the form of currency (coins and notes) and funds available immediately for business or personal use. It includes physical currency and balances in bank accounts that can be accessed at any time.

Example:

  ₹500 in your wallet is cash, while ₹5,000 in your bank account is money but not cash.
In simple terms, cash refers only to physical currency, whereas money includes both cash and digital or bank balances..

How to understand Cash:

Cash is the most liquid form of asset, meaning it can be used instantly to buy goods, pay bills, 

or settle debts.

In accounting, "cash" encompasses cash equivalents, such as treasury bills and short-term deposits, which can be quickly converted into cash.

is the easiest type of money to use because you can spend it immediately.

It helps you buy things, pay bills, or settle debts.

Importance of Cash:

• It is essential for maintaining liquidity, ensuring that businesses can meet their short-term obligations.
Cash facilitates growth and expansion through reinvestment and reduces dependency on  external borrowing.