Financial Concepts and Cash Flow Quiz

What is a cash flow forecast?

• A record of all past transactions made by a business

• A prediction of the future cash inflows and outflows of a business over a specific period

• A summary of a company's assets and liabilities

• A document showing the profit made by a business in a financial year

What does the term "net cash flow" mean in a cash flow forecast?

• The total amount of money a business has borrowed

• The total revenue earned by a business in a given period

• The difference between total cash inflows and total cash outflows in a given period

• The closing balance of a business's bank account

Which of the following is included in a Statement of Comprehensive Income but NOT in a traditional income statement?

• Revenue from sales

• Cost of goods sold

• Other comprehensive income, such as revaluation surpluses

• Operating expenses

In debt factoring, who purchases the outstanding invoices from a business?

• The business's customers

• A debt factoring company (factor)

• The government's tax authority

• The business's shareholders

What is the break-even point?

• The level of output at which total revenue equals total variable costs

• The level of output at which a business makes its maximum profit

• The level of output at which total revenue equals total costs, resulting in neither profit nor loss

• The level of output at which fixed costs are fully recovered

What is a prepayment in accounting?

• A payment made after the goods or services have been received

• A payment made in advance for goods or services to be received in a future accounting period

• A payment made to settle an outstanding debt

• A payment made to a supplier for raw materials already used

What is the formula for calculating the break-even point in units?

A business has fixed costs of £40,000, a selling price of £20 per unit, and variable costs of £12 per unit. What is the break-even point in units?

• 2,000 units

• 3,333 units

• 5,000 units

• 4,000 units

A business has the following monthly figures: cash inflows of £15,000, cash outflows of £18,000, and an opening balance of £4,000. What is the closing cash balance for the month?

• £7,000

• £1,000

• £3,000

• £19,000

A business sells its £50,000 worth of invoices to a debt factoring company, which advances 85% of the invoice value immediately. How much does the business receive upfront?

• £40,000

• £42,500

• £45,000

• £50,000