Understanding Cash Flow Basics

What is cash inflow?

• Money going out of a business

• Money coming into a business

• Money saved in a piggy bank

• Money spent on toys

Which of the following is an example of an operating activity?

• Buying a new building

• Selling goods to customers

• Borrowing money from a bank

• Paying dividends to shareholders

What is cash outflow?

• Money coming into a business

• Money going out of a business

• Money found on the street

• Money given as a gift

Which of the following is an investing activity?

• Paying employees

• Buying new equipment

• Selling products

• Paying rent

What is a financing activity?

• Activities related to the day-to-day operations

• Activities related to buying and selling assets

• Activities related to raising and repaying funds

• Activities related to making products

Which of the following is a source of cash inflow?

• Paying for supplies

• Receiving a loan from the bank

• Buying a new car

• Paying taxes

Which of the following is a use of cash outflow?

• Receiving interest from a bank

• Selling old equipment

• Paying for utilities

• Collecting money from customers

Which of the following is an example of a cash inflow from operating activities?

• Selling shares

• Collecting cash from customers

• Buying a new computer

• Paying off a loan

Which of the following is an example of a cash outflow from investing activities?

• Paying salaries

• Buying a new building

• Receiving dividends

• Selling products

Which of the following is a cash inflow from financing activities?

• Paying interest on a loan

• Issuing new shares

• Buying raw materials

• Paying for advertising