money deposited in a bank and items that a bank will accept for immediate deposit (e.g., paper money, coins, checks, money orders). Items not included in the definition of cash are postdated checks, IOUs, and notes receivable. The cash on hand and cash on deposit in the bank are shown in the balance sheet as one figure. Cash is the most liquid of the current assets and is listed first. Note that restricted cash in a bank account is not considered a current asset. An example is cash held in a foreign country where remission restrictions exist.
- currency (including bills and coin) in circulation, including checking account balances. Cash held by a bank, for example vault cash, requires no capital backing under risk-based capital rules adopted by bank regulatory agencies.
- to convert a check to cash by endorsing and presenting to a bank. Also called negotiating a check. See also currency in circulation.
paper currency and coins, negotiable money orders and checks, and bank balances; also, transactions handled in cash. To cash is to convert a negotiable instrument, usually into paper currency and coins.
asset account on a balance sheet representing paper currency and coins, negotiable money orders and checks, and bank balances. Also, transactions handled in cash. In the financial statements of annual reports, cash is usually grouped with cash equivalents, defined as all highly liquid securities with a known market value and a maturity, when acquirerest rate charged on the cash advance is usually different from the rate charged on purchases made with the same card. Frequently, the cash advance rate is higher. In many cases advance rates are variable, and are usually tied to a certain number of percentage points over the prime rate.