Chapter 20 - Cash Flow Forecast

What is meant by liquid assets?

• money that is going in and out of the business over a period of time

• long-term assets that a company has purchased and is using for the production of its goods and services

• something containing economic value and/or future benefit

• assets that are immediately available for spending on goods and services

What would most likely happen if a business had too little cash or worse, runs out of cash completely?

• liquidation

• the business would be terminated by the government

• Cannot run their production due to unpaid day-to-day expenses

• unable to borrow more money to the bank due to trust issue

predicting the flow of money into and out of a business over a certain time period.

• cash

• cash-flow

• cash-flow forecast

• analysis account

Customers/clients do not pay their purchase directly (but in a few months). What do you call them?

• debtors

• trade receivable

• creditor

• trade payable

Customers/clients do not pay their purchase directly (but in a few months). What do you note this purchase in your finance book?

• trade receivables

• trade payables

• creditor

• debtor

You purchase raw materials from your suppliers but you don't pay them directly, but maybe in a few months. You are a ....

• debtors

• creditor

• trade receivable

• trade payable

Which of the following are not the most common ways cash flow into a business?

• purchase raw materials

• debtors pay their trade receivables

• sale of assets of the business

• pay the salaries of the workers

Which of the following are the most common ways for a business to obtain cash?

• the sale of the owner's asset (e.g. private house)

• payment of trade payable

• borrow money from the bank

• sell their products

Which of the following is the not most common way for a business to let the cash flow out of a business?

• payment of trade payable

• payment of trade receivable

• repaying loans (to the bank)

• purchasing non-current asset(s)

_______ cash inflow minus cash outflow (two possible answers)

• cash flow forecast

• net cash-flow

• balance of cash-flow

• cash-flow