a benefit of cash flow is:

encourages planning for inflows/outflows, identifies negative balances, enables monitoring and action to be taken, used as business plan to raise money

the opening balance is:

closing balance of previous month

something owned by business, e.g land, buildings, machinery

Examples of cash inflows are

cash and credit sales, loans,sales of assests

identify shortfalls/indicate when large amounts of money

How can a business solve cash flow problems?

arrange overdraft, negotiate terms with creditors

What are cash flow limitations

can't plan for unexpected events, Inaccuracy

prediction of the business trading

formula for closing balance is

Net cash flow + opening balance

The opening balance is:

amount of cash at start of month

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Cashflow

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What is cashflow

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Questions 21

Answers

1
Cash flow shows a businesses profit or loss for 12 months
true
false
2
Bank interest received on a credit balance is
an inflow
an outflow
3
a benefit of cash flow is:
encourages planning for inflows/outflows
identifies negative balances
enables monitoring and action to be taken
used as business plan to raise money
4
What is a credit sale?
money loaned to the business
interest received by business
customer pays in 30 days
customer pays at time of sale
5
the opening balance is:
closing balance of previous month
set at 0 each month
how much profit/loss there is that month
closing balance of next month
6
Capital comes from
customers
government
owners/shareholders
bank
7
formula for net cash flow is
inflows + opening balance
inflows + outflows
inflows - outflows
outflows + opening balance
8
brackets around a figure shows:
a negative number
an outflow
a positive balance
a minus bank balance
9
assets are
borrowed equipment
equipment on lease
a loan by the government
something owned by business, e.g land, buildings, machinery
10
if a business has liquidity problems it is in danger of:
loosing customers
insolvency
accessing loans
opening a new store
11
Examples of cash inflows are
cash and credit sales, loans,sales of assests
heat,light water and telephone
cash sales, equipment, grants
VAT, employees wages, stock
12
a business with a negative bank balance :
will have liquidity problems
will have problems paying bills
will have lots of money
will have problems paying wages
13
A cash inflow is money coming into the business
false
true
14
a cash flow can:
whether it is a success/failing
identify shortfalls/indicate when large amounts of money
show business profit
how much money business has
15
examples of cash outflows are:
credit sales, rent , rates
salaries, capital, loans
VAT, rates, bank interest paid
VAT, utilities, bank interest received,
16
How can a business solve cash flow problems?
hire more staff
pay off overdraft and loans
buy more equipment
arrange overdraft, negotiate terms with creditors
17
Cash outflows is money going out of the business
false
true
18
What are cash flow limitations
gives real time sceanrios
quick to do
can't plan for unexpected events
Inaccuracy
19
a cash flow is a :
a balance of account
an actual statement of trading
a profit and loss account
prediction of the business trading
20
formula for closing balance is
total outflow + opening balance
Net cash flow + opening balance
net cash flow - opening balance
net cash flow - cash inflow
21
The opening balance is:
amount of cash at start of month
amount of cash business has
amount of cash at end of month
amount of cash at opening of buisness

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