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- 1. Multiple Choice
A cash flow statement shows an overview of money flowing in and out of a company
True
False
- 2. Multiple Choice
Which of the following is an example of a cash in-flow for a business?payment to supplierspaying back a loan to a bankpayment from debtorspurchase of fixed assets - 3. Multiple ChoiceWhich of the following is an example of a cash out-flow for a business?payments to creditorssale of goodspayment from debtorsreceiving a loan from the bank
- 4. Multiple ChoiceWhich of the following is NOT a use of cash-flow forecasts?They indicate how much cash is available for paying billsThey show how much the bank needs to lend to stop insolvencyThey indicate whether the business is holding too much cashThey indicate how much profit the business will make
- 5. Multiple ChoiceA firm is forecast to have a negative closing bank balance. Which would reduce the problem?sell more goods on 4 months creditproduce more goodsask customers to pay in cash and not sell goods on creditask suppliers if the firm can pay for goods in cash
- 6. Multiple ChoiceIf a cashflow forecast suggests that a firm will run out of cash, which would help the problem?purchase more fixed assetsrepay a bank loanpay suppliers immediatelydelay paying suppliers
- 7. Multiple ChoiceThe monthly net cash flow for a business is calculated by:sales revenue - cost of goods soldtotal cash in - total cash outtotal cash out - total cash intotal cash in - cost of goods sold
- 8. Multiple ChoiceThe closing bank balance is calculated by:opening bank balance + cash out-flowopening bank balance + cash in-flowopening bank balance + net cash flownet cash flow + gross profit
- 9. Multiple Choice
What is the money available to pay for day to day operational costs called?
Cash
Working capital
Profit
All of the above
- 10. Multiple Choice
Assume a firm sells goods costing £40,000 for £55,000. It provides the customer
with 70% trade credit (i.e. the customer pays only 30% of the price as a down
payment). The profit earned is __________, and the cash received is _________.
£15,000, £12,000
£15,000, £16,500
£15,000, £28,000
£15,000, £55,000
- 11. Multiple Choice
The term _________ describes how efficiently an asset can be converted into
cash.
Liquidity
Solvency
Conversion rate
Working capital cycle
- 12. Multiple Choice
In a given cash flow forecast, the closing balance in June would become the ____________ of July.
Closing balance
Working capital
Net cash flow
Opening balance
- 13. Multiple ChoiceWhich one of the following is an example of an outflow?CapitalBank LoanWagesGovernment Grant
- 14. Multiple ChoiceWhich of the following is true about cash flow?It is the same as profitIt is different from profitIt is the same as revenue
- 15. Multiple ChoiceWhat is net cash flow?The difference between revenue and costThe difference between money in and money outThe difference between assets and liabilities
- 16. Multiple Choice
Which of the following reduces a businesses cash flow?
Asking debtors for payment
Repaying an overdraft
Securing better trade credit terms from suppliers
- 17. Multiple ChoiceWhat is a long term way to improve cash inflow?Take out a loanTake out an overdraftUse a factoring service
- 18. Multiple ChoiceHow can cash outflows be improved?Buy extra equipmentLease out equipmentUse a factoring service
- 19. Multiple Choice
selling an asset would be an example of
cash inflow
cash outflow
- 20. Multiple Choice
What is the formula used for a cash flow forecast?
[ Receipts - Payments = Net Cash Flow ] + Opening Balance = Closing Balance.
[ Receipts - Payments = Net Cash Flow ] - Opening Balance = Closing Balance.
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