Cash is classified as which type of account?

• A. Asset
• B. Liability
• C. Owner's Equity
• D. Revenue

Answer: (A)

Cash is classified as an asset because it represents a resource the company controls that is expected to provide future economic benefits. Assets are things the business owns that can be used to operate and grow, and cash is the most liquid of them—money that can be used immediately to pay bills or fund new opportunities. This is different from liabilities (obligations the company owes), owner's equity (the owner's claim on the assets after liabilities), or revenue (income from business activities that increases equity but is not itself an asset). In double-entry bookkeeping, increases in cash are recorded on the debit side, while decreases are on the credit side.