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3.7 cash flow Flashcards | StudBud
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3.7 cash flow
3.7 cash flow
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Questions
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Answers
1
A cash flow forecast is to primarily
Provide a planning tool for managing a firm's cash flows
Estimate the likely value of profit over a year
Identify the different cash inflows and outflows
Identify sources of sales revenue and production costs
2
One good method used to increase cash flow for any firm is to simply generate more sales
False
True
3
One of these things is not like the other
Stocks
Debtors
Cash
Creditors
4
Money owed by an organisation where the credit terms exceed 12 months are termed
Debentures
External finance
Long-term bank loans
Long-term liabilities
5
The time between spending cash on production and receiving cash payments from customers is
The working capital cycle
Liquidity
Liquidation of assets (into cash)
Working capital
6
Liquidation is when a business cannot meet its short-term debts
False
True
7
Which of the following is not a component part of ‘
current liabilities
’
An unpaid utility bill
Creditors
Company tax
Work-in-progress
8
A financial decision for management is whether to have a 'contingency fund' to be used for
Financing expansion and organic growth
Paying creditors,including suppliers
Planned, but large one-off purchases
Ensuring unforeseen events won’t cause insolvency
9
Money owed by a firm where the credit terms is not in excess of 12 months is termed a(n)
External liability
Debtor
Creditor
Current liability
10
One of the best methods used to increase cash flow for any firm is to simply cut staff numbers
True
False
11
One of these things is not a current asset. Identify which one it is
Raw materials
Plant and machinery
Debtors
Cash
12
A cash flow forecast records the flows of cash in and out of a firm over the course of a year
True
False
13
Overtrading
is expanding rapidly without the necessary finance, causing liquidity problems
True
False
14
Annual cash flow forecasts are used to estimate final profit at the end of a trading period
False
True
15
The financial document measuring the cash generated or used by a company in a given period is a
Cash flow forecast
Profit and loss account
Trading account
Cash flow statement
