WorksheetsNational 5 Bus Mgt Cash Budgets
Total questions: 15
Worksheet time: 8mins
Name
Class
Date
1.
What is the name of the document which is used to show future income and expenditure for a business?
a)
Cash budget
b)
Cash statement
c)
Income statement
d)
Income budget
2.
What is NOT a benefit of preparing a cash budget?
a)
helps determine profits for owners and shareholders
b)
ensures there will be enough cash to pay employees and suppliers
c)
will help business plan when to invest in new equipment
d)
helps to plan a bank overdraft or additional funding in advance of when needed
3.
What name is given to the situation of having excess cash expected at the end of next month?
a)
Cash surplus
b)
Cash deficit
c)
Cash profit
d)
Cash loss
4.
What name is given to the situation of having a negative cash balance expected at the end of next month?
a)
Cash surplus
b)
Cash deficit
c)
Cash profit
d)
Cash loss
5.
Cash flow problems can be resolved by reducing expenses. Which is NOT a way of reducing expenses below?
a)
Implement new advertising campaign to increase sales
b)
Reducing overtime for staff and paying off temporary staff
c)
Finding a new supplier who will offer bulk buying discounts
d)
Delaying purchase of a new asset
6.
It is also possible to help a cash flow issue by looking at income. Which is NOT a way of helping to resolve cash flow issues?
a)
Allowing customers a longer credit period
b)
Having a special offer for a limited period
c)
Offering customers a discount for payment by cash
d)
Selling invoices to a tradefactoring company
7.
Identify the action below which would NOT help a cash deficit situation?
a)
Implement tighter inventory control and reduce wastage
b)
Negotiate a temporary overdraft with the bank
c)
Sell unwanted assets
d)
Award bonuses to staff to help motivate them
8.
What action would NOT be taken if a cash surplus is predicted?
a)
Invest in new machinery to improve efficiency
b)
Arrange a bank loan at a discounted rate
c)
Consider growing the business by opening a new branch
d)
Pay off outstanding bank loans to reduce interest payments
9.
Which of the following does NOT appear in a cash budget statement?
a)
Opening balance
b)
Profit
c)
Income
d)
Expenses
10.
Which statement is correct when calculating a cash budget?
a)
Opening balance + income - expenses = closing balance
b)
Opening balance - income + expenses = closing balance
c)
Closing balance - income + expenses = opening balance
d)
Closing balance + income- expenses = opening balance
11.
A company sees a potential cash deficit situation. This is made worse by the planned purchase of a new delivery van which is essential. What other option to fund this van would be the best solution?
a)
Sell shares to generate income
b)
Arrange for a leased van
c)
Trade factoring of invoices
d)
Sell wanted assets e.g. machinery
12.
What action below - taken by a manager when reviewing a cash budget - is FALSE?
a)
Look for trends in expenditure e.g. unexpected increases
b)
Look for trends in income e.g. unexpected drop
c)
Look to the closing balance each month for cash deficits or large cash surpluses
d)
Look for profits and losses in the statement
13.
A company has predicted an opening cash balance of £250k, income of £100k and expenditure of £150k for May. What would be its closing cash balance position for that month?
a)
£200k
b)
£300k
c)
£500k
d)
£0k
14.
A company has a cash surplus of £300k. Which action would it be most likely to take below?
a)
Launch a special offer for customers
b)
Replace the old IT system
c)
Cancel overtime for the next few months
d)
Switch to a cheaper supplier whose quality is slightly below that of current supplier
15.
A sole trader predicts a cash deficit for the next month only. What would be the easiest way to solve this situation?
a)
Temporarily reduce the amount of drawings he takes from business
b)
Factor his trade invoices to an external company
c)
Delay paying his suppliers by a month
d)
Insist that loyal customers pay by cash for that month
100 %
