What is cash?

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DEFINITION:

Most people think of cash as physical currency such as coins or bills, but in the world of finance, cash usually refers to money and anything that an entity can quickly convert into cash.

Understanding cash

Cash is the physical currency that people use every day for their transactions. Cash includes coins and bills, but also the money in your bank account that you can access by swiping your debit card at a store. For businesses, cash is any money they have on hand to pay expenses and debts – including physical currency and balances in bank accounts. Although most people think of cash as paper money, the term also refers to electronic forms of currency.

Takeaway

Cash is almost all you can give your friend to pay him back when he pays for your meal at a restaurant…

When you go out to eat with friends, sometimes it’s easier for one person to pay the bill and have everyone pay you back. Cash is something you can use to pay your friend back quickly and without fees. You could give her a $20 bill to pay for your part of the meal, but you could just as easily use an app to send an electronic transfer from your bank account. You could even write her a check if you like.

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