BANKING AFFAIRS

Detailed explanation-1: -Cash is most liquid asset because it is used for buying and selling goods and services instantly without losing its own value. It is used immediately for economic reason.

Detailed explanation-2: -Cash is the most liquid asset possible as it is already in the form of money. This includes physical cash, savings account balances, and checking account balances. It also includes cash from foreign countries, though some foreign currency may be difficult to convert to a more local currency.

Detailed explanation-3: -You just need a market in which to sell your goods or services. In that market, you don’t barter for individual goods. Instead you exchange your goods or services for a common medium of exchange-that is, money. You can then use that money to buy what you need from others who also accept the same medium of exchange.

Detailed explanation-4: -Cash is the most liquid of the financial assets and is the standard medium of exchange for most business transactions. Cash meets the definition of a monetary, financial asset. Cash is usually classified as a current asset and includes unrestricted : Coins and currency, including petty cash funds.

Detailed explanation-5: -Cash and Cash Equivalents Cash is considered the most liquid asset because it’s readily available to use. Cash can be paper money, coins, or checking or savings account balances. Cash is very useful for immediate needs and expenses, such as daily spending, rent and building an emergency fund.