Cash is legal tender, which is issued by a country’s government. Rather than carrying around goods or something else for trading, cash reduces weight and simplifies transactions. Cash is lightweight and small, which makes transporting it easy. It represents specific values of goods, which makes the exchange of cash for goods straightforward.
Cash is also considered liquid since it can be immediately exchanged for goods or services. On a corporate balance sheet, cash is considered a current asset — meaning, the most liquid asset available to the company. The cash flow statement shows all cash coming in and going out of a company, such as cash used to pay for expenses.
