chapter 30 forecasting and managing cash flows

Question 1

cash flow

Answer 1

the sum of cash payments to a business less than the sum of cash payments from the business

Question 2

insolvent

Answer 2

when a business cannot meet its short - term debts

Question 3

cash flow forecast

Answer 3

as estimate of the future cash inflows and outflows of a business

Question 4

cash inflow

Answer 4

cash payment into a business

Question 5

cash outflow

Answer 5

cash payment out of a business

Question 6

net cash flow

Answer 6

estimated difference between cash inflow and cash outflows for the period ex one month

Question 7

opening cash flow

Answer 7

cash held by the business at the start of the month

Question 8

closing cash balance

Answer 8

cash held by the business at the end of the month , which becomes next month’s opening balance

Question 9

credit control

Answer 9

monitoring of debts to ensure that credits periods are not exceeded

Question 10

bad debt

Question 11

overtrading

Answer 11

expanding a business rapidly without obtaining all of the necessary finance , resulting in a cash flow shortage