Final answer:
Cash is classified as an asset, which is a valuable item owned by an individual or a firm. It is included in the balance sheet to calculate an entity's net worth.
Step-by-step explanation:
Cash is an asset. An asset is an item of value that a firm or an individual owns, which can be used to produce something, such as paying for tuition or expenses. In contrast, a liability is a debt or something one owes. Cash, as an asset, is part of a balance sheet, which is an accounting tool that lists assets and liabilities. The balance sheet reflects a company's or individual's net worth, calculated as the value of all assets minus the total of all liabilities. Bank capital, also known as a bank's net worth, includes cash held by a bank as well as other assets such as loans and reserves.