Cash Flow Statement Quiz

What is a cash flow statement?

• A summary of a business's profit and loss

• A financial statement that indicates the movement of cash receipts and cash payments

• A report of a business's total assets and liabilities

• A statement showing the equity of a business

What does the term 'liquidity' refer to in business?

• Profitability of a business

• The ability of a business to pay its debts on time

• The total revenue of a business

• The investments of a business

Why might a business prefer its sales to be in cash?

• To avoid taxes

• To ensure it has the cash available to meet payments as they are due

• To reduce bookkeeping efforts

• To attract more customers

Which of the following is NOT a type of cash flow activity for large businesses?

• Operating activities

• Investing activities

• Marketing activities

• Financing activities

In the cash flow statement for Plant 1, what was the cash surplus/deficit for March?

• $93,000 surplus

• $1,093,500 surplus

• $93,000 deficit

• $1,026,500 deficit

Which month showed the highest total inflows in the cash flow statement for Plant 1?

• January

• February

• March

• They were all equal

What is the purpose of cash flow statements in relation to budgets?

• They replace the need for budgets

• They are only used for tax purposes

• They provide estimates of anticipated future cash flows

• They summarise past information and help predict future cash flows

In January, which manufacturer had the highest sales in the cash flow statement for Plant 1?

• A

• B

• C

• Other manufacturers

How much were the raw materials costs in February?

• $3,650,000

• $3,760,000

• $4,720,000

• $125,000

What could be a short-term remedy for cash deficits?

• Increasing prices

• Finding cheaper raw materials

• Reducing wages

• Covering deficits with surplus from previous months