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Kalyan City is a fast emerging residential township in the Thane district of Maharashtra state, India. It is a central suburban town and resides 54 km north-east of Mumbai. This blog regularly shares quality academic materials. Here we also document our unique experiences and vivid memories of life. Read our lucid, informative articles to excel your understanding, knowledge and success.


Articles published on Kalyan City Life blog is inspired by our work experience, field research, study of various good books and papers, seminars and consultations from subject scholars. Our unique collection of useful study notes is an outcome of a team effort and hard work of Gaurav Akrani, Prof. Mudit Katyani and Manoj Patil.

What is Cash? Meaning Definition Function of Cash

square What is Cash? Meaning

Cash may be in any form of currency, like banknotes and coins, which have a legal acceptance and recognition in the market.

The acceptance of cash by its user indicates that it has a trading value when tendered for purchase of goods and services.

what is cash meaning definition

Image credits © Canadian Wendy 24.

square Definition of Cash

The definition of the term cash can be stated as follows,

"Cash is money in form of banknotes and coins that are issued by the government of a country under the administration and control of its finance ministry or department of finance."

square Function of Cash

The function of cash is depicted in the following diagram.

function of cash

Please refer above diagram while reading following listed points to study and understand the function of cash.

  1. Consumers spend cash to fulfill their primary (basic) needs like food, clothing, shelter, education, etc. They also spend cash to satisfy their ancillary needs such as entertainment, buying luxurious goods, tourism, so on.
  2. Entrepreneurs accumulate cash in the form of profits earned by providing goods and services to consumers. They use this profit for the expansion of business. Some amount of this profit is then distributed among investors and is also used for maintaining reserves to meet contingencies.
  3. Employees or workers get a return for their work in form of salaries (wages), short-term benefits and allowances like medical and travelling allowance, and long-term benefits such as provident fund, gratuity, pension and so on.

The function of a cash is a continuous and never-ending process.

square Recognition of Cash

The recognition of cash by its users can be explained as follows:

  1. For an individual, cash is usually interpreted as money in the physical or tangible form.
  2. For a business, the term cash has a wider scope. Since, cash is an asset to the business, and it is sub-grouped in current assets of the entity.

square Conclusion on Cash

Today, cash acts as one of the most prominent mediums of exchange for the purchase goods and services, especially in the retail market. Therefore, it is mandatory to have a recognized exchange value for cash.



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