To take the cake, during the mid-1800s, originally meant to win a prize or a competition and thus bring home the honors, which may well have been an actual cake although the word cake had long been used to mean “prize.” While it still may be used this way today, I personally have never heard it used that way nor have I used it myself.
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Meaning Of Idiom ‘Take the Cake’
When something takes the cake it is a remarkable example of something negative or positive. It may describe something that is very surprising, annoying, foolish, etc.
To take the cake basically means to be the most outstanding example in some way, whether negative or positive. It tends to be used more often in regards to something negative.
Examples Of Use
“We’ve had a lot of bad workers here but he really takes the cake.”
“So you were late because you had to wait in line for the new iPhone? I’ve heard a lot of excuses but that one takes the cake.”
“There are some good restaurants around here but the new Italian place takes the cake. They have a butter-poached halibut that will knock your socks off.”
“I have to admit, your resume takes the cake. You’re very impressive.”
Origin
The modern figurative use of this phrase dates from the 1880s. It may particularly be related to the cakewalk, for which a cake was the prize. In English, when something is described as a cakewalk, it is easy, similar to a piece of cake.