Cash Flow Quiz

What is cash flow?

• The amount of profit a business makes in a year

• The flow of cash into and out of a business over time

• The total number of customers a business has

• The amount of inventory held by a business

Which of the following best defines cash inflow?

• Money spent by a business during a period of time

• Money lost due to poor decisions

• Money received by a business during a period of time

• The value of business assets

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

• Selling goods to customers for cash

• Receiving payment from a debtor

• Paying wages to employees

• Receiving a bank loan

What could happen if a business runs out of cash?

• It will make more profit

• It may face serious financial problems

• It will increase its market share

• It will automatically get more investments

Which of the following is NOT a common source of cash inflow?

• Sale of goods for cash

• Paying salaries

• Debtors paying their bills

• Selling business assets

What does it mean when a customer is called a 'debtor'?

• They have returned a product

• They work for the company

• They bought something but haven’t paid yet

• They sold goods to the business

Which of the following would be recorded as a cash inflow for a business?

• Paying off a bank loan

• Selling an old company car

• Paying employee salaries

• Buying raw materials

Which of the following transactions is a cash outflow?

• A customer pays for a product

• The business borrows money from the bank

• The business purchases a new computer for cash

• Investors put more money into the business

Why is cash considered a liquid asset?

• Because it is stored in a liquid form

• Because it can be turned into assets quickly

• Because it can be spent immediately on goods and services

• Because it increases the value of non-current assets

What is one reason a business might receive a cash inflow?

• Paying off debts

• Borrowing money from a bank

• Paying utility bills

• Purchasing new stock