Cash Flow Forecasting and Costing Quiz

What is the purpose of a cash flow forecast?

• To analyze market trends

• To record past cash transactions

• To predict future cash inflows and outflows

• To calculate total revenue

What is the formula for Net Cash Flow?

• Total Cash In + Total Cash Out

• Total Cash In - Total Cash Out

• Total Cash In * Total Cash Out

• Total Cash In / Total Cash Out

What does a negative answer in the cash flow forecast indicate?

• Equal cash inflows and outflows

• Less cash inflows than outflows

• More cash inflows than outflows

• No cash transactions

What are some causes of cash flow forecast problems?

• Stable market conditions

• Rapid expansion

• Effective planning

• Poor credit control

How can a business improve cash flow by increasing cash inflows?

• Decreasing overdrafts

• Reducing asset sales

• Taking short-term loans

• Delaying trade receivables

What is the purpose of costing in a business?

• To avoid budgeting

• To calculate profit/loss

• To increase expenses

• To engage in trading activities

Which approach to costing absorbs all costs of a business into the cost of products made?

• Contribution Costing

• Variable Costing

• Full Costing

• Marginal Costing

What is the formula for calculating Contribution per unit?

• Selling price of one unit of output - Variable cost of producing one unit of output

• Total Revenue - Total Cost

• Total Contribution - Fixed Costs

• Selling price of one unit of output - Fixed costs

What is Break-Even Analysis used for?

• To determine the level of output for no profit or loss

• To calculate profit only

• To avoid resource use

• To increase total costs

What is one drawback of Break-Even Analysis?

• All products are sold

• Semi-Variable Costs

• Total Revenue always equals Total Cost

• Graphs are always straight