What term describes physical currency and instantly accessible funds?

What term describes physical currency and instantly accessible funds?

• A. Cash
• B. Credit
• C. Liquidity
• D. Capital

Answer: (A)

The term that describes physical currency and instantly accessible funds is cash. Cash encompasses both coins and paper money that are used for immediate transactions without the need for any form of processing or conversion. This liquidity allows individuals and businesses to make purchases and pay debts on the spot. In a business context, having cash on hand is crucial for daily operations and financial stability because it provides the flexibility to cover expenses as they arise. Conversely, credit refers to borrowed funds that need to be repaid in the future, liquidity is a broader term describing the ease of converting assets into cash, and capital typically refers to financial resources used for production or investment that may not be readily available as cash.

The term that describes physical currency and instantly accessible funds is cash. Cash encompasses both coins and paper money that are used for immediate transactions without the need for any form of processing or conversion. This liquidity allows individuals and businesses to make purchases and pay debts on the spot.

In a business context, having cash on hand is crucial for daily operations and financial stability because it provides the flexibility to cover expenses as they arise. Conversely, credit refers to borrowed funds that need to be repaid in the future, liquidity is a broader term describing the ease of converting assets into cash, and capital typically refers to financial resources used for production or investment that may not be readily available as cash.