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:

• £2000

• £1500

• £500

• £2500

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

The monthly net cash flow for a business is calculated by:

• sales revenue - cost of goods sold

• total cash in - total cash out

• total cash out - total cash in

• total cash in - cost of goods sold