1.3.3 Business Cash

Question 1

Cash Uses

Answer 1

-Pay bills
-Pay overheads
-Pay variable costs
-Contribute to some fixed costs

Question 2

Cash and Profit

Answer 2

Once all costs have been covered by cash, only then can a business make profit

Question 3

Net-cash Flow Formula

Answer 3

Cash Inflows - Cash Outflows

Question 4

Cash Inflows Examples

Answer 4

-Cash sales
-Receipts from trade customers
-Sale of spare assets
-Investment of share capital
-Personal funds invested
-Receipt of bank loan
-Governement grants

Question 5

Cash Outflows Examples

Answer 5

-Payment of overheads, wages and salaries
-Payment of suppliers
-Buying equipment
-Interest on bank loan or overdraft
-Payment of dividends
-Repayment of loans
-Income tax, VAT and corporation tax

Question 6

Opening Balance

Answer 6

Same as closing balance for previous month

Question 7

Closing Balance

Answer 7

Net-Cash Flow + Opening Balance