cash equivalent

Meanings

1. 1nouncountablefinance

   An asset, such as a short-term government bond, that is so safe and easy to sell that it can be treated almost like cash.

   Grammar: Usually plural: cash equivalents are listed on the balance sheet.

   Patterns

   • cash and cash equivalents

   The company holds $2 million in cash and cash equivalents.

   Treasury bills are a common cash equivalent.

   Auditors checked that every cash equivalent could be sold within days.

2. 2nouncountablebusiness

   The amount of money something is worth, used to compare a benefit that is not paid in cash.

   Grammar: Often followed by of: the cash equivalent of a company car.

   Patterns

   • the cash equivalent of something

   The cash equivalent of the voucher is fifty dollars.

   Employees can take a cash equivalent instead of the free meal.

Word forms

Common combinations

cash and cash equivalents

Cash and cash equivalents rose after the sale.

short-term cash equivalent

A money market fund is a short-term cash equivalent.

treat as a cash equivalent

Auditors treat treasury bills as a cash equivalent.

cash equivalent value

The cash equivalent value of the prize is $500.

Synonyms and how they differ

liquid asset

Liquid asset is a broader term that includes cash itself, while a cash equivalent is a near-cash investment.

near-cash

Near-cash is informal and used in conversation rather than financial reports.

marketable security

Marketable security can be a longer-term investment, whereas a cash equivalent must mature very soon.

Opposites

Word family

cash noun

money in notes and coins or in the bank

equivalent adjective

equal in value or effect

equivalence noun

the state of being equal

Commonly confused: cash equivalent or liquid asset?

Practice

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