Money is defined by its three principal characteristics: medium of exchange, store of value, and unit of account. Let’s go through each one-by-one:
A “medium of exchange” means that you can use money to pay for goods. If you swap shells for a cow, then the shells are a medium of exchange
A “store of value” means that the value of money is at least somewhat preserved and can be used later for other purposes, such as exchange. This criteria makes an “egg” a poor candidate to be money because they can go rotten, but more durable items like slips of paper and gold coins can both hold this distinction
A “unit of exchange” means that people quote prices in terms of money. For instance, while you can literally use anything to count as money, in the United States everyone quotes prices in terms of dollars, so dollars are what we consider money.
Cash is the physical manifestation of currency. That can take the form of a slip of paper (in the United States, physical dollar bills are actually made out of 75% cotton, 25% linen cloth) or coins. However, physical currency is not the only form of money!
The closest thing to cash is reserves. Reserves are dollars that are held by depository institutions (banks) in their master accounts at the Federal Reserve. While they have no physical form–they are just bits in the Federal Reserve’s ledger that says X Bank owns Y dollars of reserves, they can always be converted into physical currency. Reserves are used by banks to pay each other, and for the Federal Reserve to pay banks. The amount of cash plus the amount of reserves in the country forms what is called the monetary base (a.k.a. “M0”), and is often what people mean when they say “the total money supply in the country is…”
However, there are other assets that are almost the same as hard cash, but not quite, that we also consider to be “money” or “near-money”. Consider your standard bank deposits under $250,000. They are not official central bank notes (like dollar bills) and your local bank branch does not need to back up your deposits with cash or reserves on hand (we use a “fractional reserve” system where they need to keep a fraction on hand but not 100%). However, because of regulations, banks are required to be able to convert your deposits (which are literally just bits in the bank’s ledger that says X Customer owns Y dollars) into cash dollars upon request. As a result, these “demand deposits” (along with traveler’s checks) are considered money as well and along with the monetary base is collectively referred to as M1.
“Near-money” share a lot of the components of M1 but are less liquid and less able to be directly converted into cash. They include uninsured demand deposits (those above $250,000 are not insured by the FDIC and thus it is conceivable that in a bank run they might not be able to be converted to cash), small time deposits, savings accounts, and other financial instruments that all-but-certainly can be converted into cash, but there may be some slight difficulties in doing so immediately. As such, they are “near-money”--they have nearly all the same characteristics but have some slight differences that make them less useful as a medium of exchange. Money plus near-money is collectively referred to as M2.
“Broad money” takes this logic a step forward and encompasses money-like assets that are slightly less liquid and slightly harder to convert immediately into cash, but are sufficiently safe that they have a lot of money-like properties. These include longer time-horizon time deposits and certain very short-term, safe corporate and government debt. Broad money, along with M2, combine to form M3.
On a company’s balance sheet, anything in M3 is considered “cash or equivalents”. There are a lot of reasons why a corporation may prefer to not keep cash itself on its balance sheets including security costs, difficulty paying employees in cash as opposed to direct deposit, and the fact that cash does not earn interest. However, since anything in M3 can be readily converted into cash on a relatively short notice (whether through maturation or by quickly selling the assets on highly liquid markets), they are considered “cash equivalents” for accounting purposes.