What is Cash In Accounting - Meaning

About Cash Meaning In Accounting

Do You Know About Cash / What is Cash In Hand / What is a Cash Account In Accounting

Here we will study about “What is Cash in Accounting?

Cash Definition And Meaning

In Accounting, Cash is a Current Asset and it means any amount or payment received or paid in the form of money or currency other than Credit Payments And Receipts are Cash in Accounting. Credit Card Receipts And Payments are also considered as Cash Receipt And Cash Payments.


Cash at Bank shows Cash deposited into the Company’s Bank Account while Cash in Hand shows Cash withdrawn from Bank Account of Company that is kept safe in the custody of Chief Cashier and it is available for Cash Payments And Investments.







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For Recording Cash Account Transactions Cash Book is Maintained that serves as a Journal as well as a Ledger. The ending balance is transferred to Balance Sheet Under Current Assets Section on Assets Side.

The Favourable or Natural Balance for Cash is Debit in T-Account while Unfavourable of Negative Balance is Credit. When Cash increases, we debit it and when it decreases, we credit it.



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Example, Mr. A is a Sole Owner of the Business paid Rent Rs. 10000 as a Business Expense. This is a Business Transaction. Here two accounts involved in this Business Transaction. One is Rent that is an expense while Cash Account is a Current Asset. As the business is paying the Rent Expense and it is increasing by Rs. 10000, so we debit it. Cash is also decreasing by Rs. 10000, so we credit it as shown in the below Accounting Journal Entry:


                                   Rent a/c    10000


                                                      Cash a/c    10000



(Paid Rent Rs. 10000)


Cash Account is the important Current Asset that meet daily expenses of the business. Assets of the businesses are purchased through Cash. Liabilities like Accounts Payable / Creditor (Supplier) is paid through it. The Cash is received from Accounts Receivable / Debtor (Customer) on or before due date.


Is Cash An Asset Or Liability


Cash is a Current Assets which is the most Liquid Asset to pay out Expenses and other Liabilities. But, it is not a liability as Cash is the resource of the business to pay out liabilities.



So, it is all about “What Does Cash Mean in Accounting”?


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