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cash on hand. Definition. Funds that are immediately available to a business, and can be spent as needed, as opposed to assets that must be sold to generate cash. The amount of cash on hand determines what projects a company can undertake, or what financial hardships can be absorbed, without going into debt or arranging other financing.
The cash method is the more commonly used method of accounting in small business. Under the cash method, income is not counted until cash (or a check) is actually received, and expenses are not counted until they are actually paid.