Chapter 22: Cash Flow
2 years ago
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15 QuestionsShow answers
  • Question 1
    30 seconds
    Q. Which of the following is an example of a cash in-flow for a business?
    answer choices
    payment to suppliers
    paying back a loan to a bank
    payment from debtors
    purchase of fixed assets
  • Question 2
    30 seconds
    Q. Which of the following is an example of a cash out-flow for a business?
    answer choices
    payments to creditors
    sale of goods
    payment from debtors
    receiving a loan from the bank
  • Question 3
    30 seconds
    Q. Complete this statement with the best option: ‘The longer the cash-flow cycle… .’
    answer choices
    the less cash the business will need
    the lower will be the firm’s working capital needs
    the less chance there is for the business to run out of cash
    the more working capital and cash the business will need
  • Question 4
    30 seconds
    Q. INAC’s gross profit for July was:
    answer choices
    $2,000
    $1,500
    $500
    $2,500
  • Question 5
    30 seconds
    Q. INAC’s net cash flow for July was:
    answer choices
    $2,000
    $1,500
    $500
    $2,500
  • Question 6
    30 seconds
    Q. Which is the best explanation for a business running into cash-flow problems?
    answer choices
    demanding quick payment from customers
    allowing customers a long credit period
    delaying payments to suppliers
    producing goods when demanded by customers
  • Question 7
    30 seconds
    Q. Which of the following is NOT a use of cash-flow forecasts?
    answer choices
    They indicate how much cash is available for paying bills
    They show how much the bank needs to lend to stop insolvency
    They indicate whether the business is holding too much cash
    They indicate how much profit the business will make
  • Question 8
    30 seconds
    Q. Which of the following is the value of x? ($000)
    answer choices
    $2
    $4
    $6
    ($2)
  • Question 9
    30 seconds
    Q. Which of the following is the value of y? ($000)
    answer choices
    $4
    $6
    $9
    ($9)
  • Question 10
    30 seconds
    Q. Which of the following is the value of z? ($000)
    answer choices
    $2
    $5
    $(15)
    $(5)
  • Question 11
    30 seconds
    Q. Business cash flow forecasts are of use in all of the following situations except:
    answer choices
    calculating last year’s profit or loss
    finding out how much cash will be needed to start a business
    keeping informed about the liquidity of the business
    helping the manager to plan when to borrow money
  • Question 12
    30 seconds
    Q. A firm is forecast to have a negative closing bank balance. Which would reduce the problem?
    answer choices
    sell more goods on 4 months credit
    produce more goods
    ask customers to pay in cash and not sell goods on credit
    ask suppliers if the firm can pay for goods in cash
  • Question 13
    30 seconds
    Q. If a cashflow forecast suggests that a firm will run out of cash, which would help the problem?
    answer choices
    purchase more fixed assets
    repay a bank loan
    pay suppliers immediately
    delay paying suppliers
  • Question 14
    30 seconds
    Q. The monthly net cash flow for a business is calculated by:
    answer choices
    sales revenue - cost of goods sold
    total cash in - total cash out
    total cash out - total cash in
    total cash in - cost of goods sold
  • Question 15
    30 seconds
    Q. The closing bank balance is calculated by:
    answer choices
    opening bank balance + cash out-flow
    opening bank balance + cash in-flow
    opening bank balance + net cash flow
    net cash flow + gross profit
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