Cash is a physical currency and coins, as well as funds held in bank accounts, that a company uses to conduct transactions, make payments, and cover expenses.
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Last Updated: December 1, 2025
The most common definition of cash is that it’s “the physical form of money.” While the term “cash” typically refers to bills or coins, it can also refer to bank accounts, checks, or other forms of money that can be easily converted into physical cash.
A cash definition often used in business refers to anything that a company can easily liquidate as cash. For instance, a company’s cash account includes all currency, coins, bank deposits, checking accounts, and savings accounts a company owns.
This guide is primarily concerned with the business definition of cash. Most people are familiar with the idea that cash means currency and coins. That said, business owners may have to wrap their minds around the fact that cash includes bank accounts and deposits as well; that fact can take some getting used to.
From an accounting perspective, cash refers to the company’s current assets. Additionally, cash means any assets that can be turned into cash within one year. Likewise, a business’s cash flow (also known as a cash flow statement) shows the company’s net amount of cash. A cash flow statement is a snapshot of a company’s cash position after adding and subtracting incoming and outgoing cash and assets.
Cash is a simple, widely-accepted, and reliable form of payment. Where credit card companies require additional systems, fees, and internet connections in order to process customer transactions, cash handling simply requires a bit of arithmetic and a locked drawer. However, fewer people carry cash these days. This is partly due to the convenience of modern banking systems and the inconvenience of obtaining and carrying currency or bills.
That said, while it seems like paper money may have been around forever, this isn’t true. Paper currency dates back only to around the 18th century, and it has no inherent value like a gold coin might have. Instead, the value of paper bills is set by people’s faith in the government or bank supporting the currency. However, this ability of a government to determine the price of its currency can affect inflation and consumer prices.
If prices become inflated, there can be a mismatch between the price of goods and the value of cash. For example, an example of cash’s value becoming unlinked with price occurs in economies where it costs $100,000 to buy a carton of eggs. This (admittedly unlikely) scenario might happen because inflation is so high that currency has become virtually worthless.
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Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
Written by ZenBusiness Editorial Team
The ZenBusiness Editorial Team has more than 20 years of combined small business publishing experience and has helped over 850,000 entrepreneurs launch and grow their companies. Our writers and business formation experts are dedicated to providing accurate, practical, and trustworthy guidance so business owners can make confident decisions.
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