Cash

Cash is money in the form of notes and coins that has been issued by the governments of different countries. Bank notes and coins hold the monetary value of the amount printed on them. Cash is a legal tender that can be exchanged for goods and services.

Legal tender is anything that is recognised by law as something that can be used to settle a debt. Businesses are therefore legally obligated to accept cash as a method of payment for their goods and services.

Benefits of paying with cash include;

• Cash is accepted everywhere.

• There are no hidden fees.

• Its easier to budget.

• Avoids interest charges.

Drawbacks of paying with cash include;

• Vulnerable to theft.

• Unable to use it to make online purchases.

• May not be able to hold reservations.

• Lack of perks.

• ATM withdrawal charges

Cheques

A cheque is a small document containing written instructions to pay a specified amount of money to the named person or organisation and deduct it out of the payees bank account.

The payer of the cheque must include;

• The date

• The payee

• The amount to be paid

• A signature to authorise

Benefits of paying by cheque include;

• Easy to use.

• Widely accepted.

• Security of not needing to carry cash.

• Can be used to pay large amounts.

• Payment can be stopped if necessary.

• Records are kept.

Drawbacks of paying by cheque include;

• Not suitable for small amounts.

• Time lag between issuing a cheque and money being transferred.

• Not legal tender so can be refused.

• Risk that payer has insufficient funds.