cash, sales and purchases

Question 1

what is cash?

Answer 1

the liquid assets of the enterprise

Question 2

what is cash mainly generated by?

Answer 2

sales

Question 3

why is cash used to make purchases?

Answer 3

in order for the enterprise to operate

Question 4

liquid assets:
what is cash the money that an enterprise can access easily to?

Answer 4

to pay its short-term liabilities

Question 5

liquid assets:
what is in the till?

Answer 5

the notes and coins

Question 6

liquid assets:
what can be sold easily?

Answer 6

products that can be sold easily

Question 7

liquid assets:
what are debtors (invoices) expected to do?

Answer 7

expected to be paid within a few days

Question 8

liquid assets:
what is the bank balance?

Answer 8

Money in the enterprise’s
bank account

Question 9

liquid assets:
what may a bank balance include?

Answer 9

an overdraft and loans

Question 10

importance of liquid assets:
what is liquidity a measure of?

Answer 10

an enterprise’s ability to convert its assets into cash

Question 11

importance of liquid assets:
what is the most liquid asset?

Answer 11

cash

Question 12

purchases:
why must an enterprise need cash to make purchases?

Answer 12

order for it to operate smoothly

Question 13

purchases:
what may purchases include?

1. why raw materials?
2. what are 6 examples of insurances?
3. what are 4 business equipments?

Answer 13

1. as they are required to produce goods for sale
2. wages and salaries, heating and lighting, insurance and marketing
3. machinery, office equipment and computers