Cash is an asset that is used to hold a large number of expenses. It has a balance of a normal debit. And it will decrease with credit and increase with a debit. In simple terms, cash is an asset and it was increasing in every journal entry because this is debit.
Advantages of Cash as an asset:
Having cash means that you can purchase daily goods whatever you need. It can control every entity of past events we used. Every cost of measurement was going smoothly and was reliable. It was only a risk-free investment. It will also be used as an emergency fund. ..
Disadvantages of Cash as an asset:
When you hold a large amount of cash, you will also be getting taxed in a long term. When other investments come along, we don’t get attached to the risk premium. Credit was highly much increased.
Features of Cash:
Role of Credit:
A company takes credit loans to run its business without facing a shortfall. For example, suppose a manufacturer company of video games invests some money in purchasing raw materials to convert them into good inventory, but the good inventory was not immediately sold so that the company took out a loan to buy more inventory. The company then releases the capital in the form of inventory.
Advantages of Credit:
The company was not worried about liquidity because Cash Credit helps in company financial crises. The arrangement of credit was easy from any bank. It is flexible and made Cash Credit many times. It can be reducing the tax burden on the company because of interest payments. Cash Credit is used for the borrower to make less on his financing.
Disadvantages of Credit :
High-interest rates as compared to traditional loans. Charges of commitment were minimum on the borrower. It was a short-term loan and also difficult in securing. Never give an extended period and make a new policy after expiration. Every person especially borrowers faced a lot of problems in this. ..
Features of Credit:
Role of Debit:
Debit represents the destination of an asset. A destination is an economic benefit that can flow to include assets like cash, buildings, and amount owed to you by others, but also expenses where a business pays a 3rd party for a good or service they have provided, and dividends where a business distributes some of its cash to its owners. For example, a person went into the company and use a debit card to purchase an iPhone because Debit works as an asset it removes the payment of an iPhone from a person’s bank account.
Advantages of Debit:
Cash was an asset that we used to purchase smaller items from our bank. It was directly connected to our bank and was best for purchasing smaller items.
Disadvantages of Debit:
Some people find it difficult to get over-draft payment fees, while others find it difficult to get fundslimited. Requiring a pin is not good for everyone.
Features of Debit:
Conclusion:
From the entire Topic “Is cash Debit Or credit?” We have concluded that Cash is a form of credit because people can afford to spend more money than they earn.
Cash is often seen as a form of payment, but it can also be used as a form of debit or credit. In this article, we’ll discuss the pros and cons of cash as both a form of payment and a store of value.
Cash is an asset in banking terms because it decreases in debit when making payments from another resource. ..
Debit cards are becoming more popular, but some people argue that they’re not as good as credit cards because they can lead to debt. Is debit good or not? Discuss. ..
I like this because it was good for Cash withdrawals and prevents us from overspending money and debt. ATM is a good example of this purpose.
Credit is a valuable tool for businesses and individuals. It allows people to borrow money from banks and pay back the money with interest. Credit is also important for businesses because it allows them to expand their business and get new customers. However, some people argue that credit is not always good for businesses because it can lead to them being over-leveraged and having too much debt.
It will help us to save money on home expenses like car, home but in a certain amount of time and I think it is good because a middle-class can afford a bigger car, homes. They are already stuck in home expenses that’s why I don’t prefer this.
