Cash and cash equivalent are the most liquid assets within the enterprise. It isa term that indicates the amount of assets (property) that takes the form of cash, deposits with financial institutions (short-term) and cash equivalents (stamps, checks, vouchers for goods and services).
Cash is a stock variable, it depicts the state of money in the enterprise at some point, they are the most liquid component of assets, ready to use for payment of obligations.
Use of the cash in practice: Cash in the enterprise is in the form of money and deposits and its main function is to provide the liquidity.
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