What are the Main Functions of Cash and Cash Equivalents in Business?

[Suba]

In the business world, cash and cash equivalents are considered the most liquid assets, so they are placed at the top of the debit list. Cash includes not only cash and coins but also bank balances and e-wallets. Cash equivalents refer to assets that are easily converted into cash, typically in the form of short-term investments such as government bonds, money market mutual funds, commercial paper, etc. Cash equivalents must also meet criteria and characteristics such as short-term maturity, generally less than three months, high liquidity, low risk, and insignificant changes in asset value.