AAT L4 CFST Cash vs Profit - Receipts and Payments Flashcards

Front

Example: Monthly direct debit for factory electricity – £4,500 per month

Back

Regular Payment

Explanation: A recurring operational cost, part of normal trading activity.

Front

Example: Insurance payout of £50,000 after flood damage to warehouse

Back

Exceptional Receipt

Explanation: A one-off, unusual cash inflow not related to day-to-day operations.

Front

Example: Sale of surplus CNC machinery for £80,000

Back

Capital Receipt

Explanation: Proceeds from selling a non-current asset; not part of regular sales revenue.

Front

Example: Weekly customer payments on 30-day terms – average £25,000 per week

Back

Regular Receipt

Explanation: Predictable inflow from customers for goods sold; part of regular trading activity.

Front

Example: Legal settlement of £20,000 in our favour following a supplier dispute

Back

Exceptional Payment

Explanation: Unusual, non-recurring cash outflow unrelated to routine operations.

Front

Example: Purchase of a new production line – £350,000

Back

Capital Payment

Explanation: Outflow for acquiring a fixed asset; not part of operating expenses.

Front

Example: Corporation Tax overpayment refund – £12,000 from HMRC

Back

Taxation Refund

Explanation: Non-trading cash inflow; correction or rebate of tax already paid.

Front

Example: Annual dividend of £40,000 paid to shareholders

Back

Dividend Payment

Explanation: Outflow to owners; profit distribution, not a business operating cost.