Cash is often referred to as a "non-earning" asset. Thus, one goal of cash management is to minimize the amount of cash necessary to conduct business.

Question

Quizplus · Accepted Answer

Cash is not considered an earning asset because it does not generate any income, such as interest or dividends. Therefore, it is important for businesses to manage their cash efficiently and minimize the amount of cash held to reduce the opportunity cost of not earning a return on the cash.

Cash Is Often Referred to as a "Non-Earning" Asset