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Cash Flow

Total questions: 21

Worksheet time: 12mins

Name
Class
Date
1.

A cash flow statement shows an overview of money flowing in and out of a company

a)

True

b)

False

2.
Which of the following is an example of a cash in-flow for a business?
a)
payment to suppliers
b)
paying back a loan to a bank
c)
payment from debtors
d)
purchase of fixed assets
3.
Which of the following is an example of a cash out-flow for a business?
a)
payments to creditors
b)
sale of goods
c)
payment from debtors
d)
receiving a loan from the bank
4.
Which of the following is NOT a use of cash-flow forecasts?
a)
They indicate how much cash is available for paying bills
b)
They show how much the bank needs to lend to stop insolvency
c)
They indicate whether the business is holding too much cash
d)
They indicate how much profit the business will make
5.
A firm is forecast to have a negative closing bank balance. Which would reduce the problem?
a)
sell more goods on 4 months credit
b)
produce more goods
c)
ask customers to pay in cash and not sell goods on credit
d)
ask suppliers if the firm can pay for goods in cash
6.
If a cashflow forecast suggests that a firm will run out of cash, which would help the problem?
a)
purchase more fixed assets
b)
repay a bank loan
c)
pay suppliers immediately
d)
delay paying suppliers
7.
The monthly net cash flow for a business is calculated by:
a)
sales revenue - cost of goods sold
b)
total cash in - total cash out
c)
total cash out - total cash in
d)
total cash in - cost of goods sold
8.
The closing bank balance is calculated by:
a)
opening bank balance + cash out-flow
b)
opening bank balance + cash in-flow
c)
opening bank balance + net cash flow
d)
net cash flow + gross profit
9.

What is the money available to pay for day to day operational costs called?

a)

Cash

b)

Working capital

c)

Profit

d)

All of the above

10.

In a given cash flow forecast, the closing balance in June would become the ____________ of July.

a)

Closing balance

b)

Working capital

c)

Net cash flow

d)

Opening balance

11.
Which one of the following is an example of an outflow? 
a)
Capital 
b)
Bank Loan
c)
Wages 
d)
Government Grant
12.
Which of the following is true about cash flow?
a)
It is the same as profit
b)
It is different from profit
c)
It is the same as revenue
13.
What is net cash flow?
a)
The difference between revenue and cost
b)
The difference between money in and money out
c)
The difference between assets and liabilities
14.

Which of the following reduces a businesses cash flow?

a)

Asking debtors for payment

b)

Repaying an overdraft

c)

Securing better trade credit terms from suppliers

15.
What is a long term way to improve cash inflow?
a)
Take out a loan
b)
Take out an overdraft
c)
Use a factoring service
16.
How can cash outflows be improved?
a)
Buy extra equipment
b)
Lease out equipment
c)
Use a factoring service
17.

selling an asset would be an example of

a)

cash inflow

b)

cash outflow

18.

What is the formula used for a cash flow forecast?

a)

[ Receipts - Payments = Net Cash Flow ] + Opening Balance = Closing Balance.

b)

[ Receipts - Payments = Net Cash Flow ] - Opening Balance = Closing Balance.

19.
Cash Flow Statement is based upon
 
a)
Cash basis of accounting
b)
Accrual basis of accounting
c)
Credit basis of accounting 
d)
None of the above
20.

Cash Inflows - Cash Outflows =

a)

Net Cash Flow

b)

Opening Balance

c)

Closing Balance

21.

Cash is not the same as profit. Why?

a)

Cash may come from loans and investors, profit only comes from sales revenue

b)

They are the same

c)

Cash is used to pay the bills within a business

d)

Cash flow stops a business from going bankrupt

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