Chapter 22: Cash Flow

Which of the following is an example of a cash in-flow for a business?

• payment to suppliers
• paying back a loan to a bank
• payment from debtors
• purchase of fixed assets

Which of the following is an example of a cash out-flow for a business?

• payments to creditors
• sale of goods
• payment from debtors
• receiving a loan from the bank

Complete this statement with the best option: ‘The longer the cash-flow cycle… .’

• the less cash the business will need
• the lower will be the firm’s working capital needs
• the less chance there is for the business to run out of cash
• the more working capital and cash the business will need

INAC’s gross profit for July was:

• $2,000
• $1,500
• $500
• $2,500

INAC’s net cash flow for July was:

• $2,000
• $1,500
• $500
• $2,500

Which is the best explanation for a business running into cash-flow problems?

• demanding quick payment from customers
• allowing customers a long credit period
• delaying payments to suppliers
• producing goods when demanded by customers

Which of the following is NOT a use of cash-flow forecasts?

• They indicate how much cash is available for paying bills
• They show how much the bank needs to lend to stop insolvency
• They indicate whether the business is holding too much cash
• They indicate how much profit the business will make

Which of the following is the value of x? ($000)

• $2
• $4
• $6
• ($2)

Which of the following is the value of y? ($000)

• $4
• $6
• $9
• ($9)

Which of the following is the value of z? ($000)

• $2
• $5
• $(15)
• $(5)