Edexcel GCSE Business 1.3.3 Cash and cash flow

Why is cash important for a business?

• It’s only used for buying new equipment.

• It’s needed to pay day-to-day expenses.

• It helps increase a business’s profit directly.

• It helps to advertise products.

Which of the following is NOT something cash is used for in a business?

• Paying suppliers

• Buying stock

• Making a profit

• Paying employee wages

What might happen if a business runs out of cash?

• It could become profitable.

• It might go out of business.

• It would hire more staff.

• It would increase stock levels.

What is it called when a business doesn’t have enough cash to pay its bills?

• Profitability

• Cash flow

• Insolvency

• Revenue

What is the main difference between cash and profit?

• Cash is money in the bank; profit is what’s left after all expenses.

• Cash is only for paying wages; profit is for paying rent.

• Cash and profit are the same thing.

• Cash is earned monthly; profit is earned yearly.

What are cash inflows?

• Money the business spends.

• Money coming into the business.

• The total expenses of a business.

• Money borrowed by the business.

Which of the following is an example of a cash inflow?

• Paying for electricity bills

• Paying rent

• Money from selling products

• Paying employee salaries

What are cash outflows?

• Money coming into the business from sales.

• Money going out of the business for expenses.

• Total profit of a business.

• None of the above.

Which of the following is NOT an example of a cash outflow?

• Paying off a loan

• Paying suppliers

• Customer paying for products

• Paying wages

If a business has more cash inflows than cash outflows, what does it have?

• Negative cash flow

• A cash shortage

• Net cash inflow

• Insolvency