key words - page 2

Question 1

Cash Flow

Answer 1

Is money flowing in and out of a business over a period of time, calculated at the exact time the cash enters or leaves the bank account/till. (CASH FLOW IS NOT PROFIT)

Question 2

Cash Flow Statement

Answer 2

Is a plan showing all the expected cash receipts and cash payments in a firm over a period of time. It is a business’s estimate of the future timing and source/nature of its income and expenditure.

Question 3

Profit

Answer 3

Is calculated by recording all transactions that will lead to cash going in or out of the business either at that moment or at some point in the future.

Question 4

Cash Inflow (Receipts)

Answer 4

A flow of cash into the business.

Question 5

Cash Outflow (Expense)

Answer 5

A flow of cash out of the business.

Question 6

Cash Flow Forecast

Answer 6

A future prediction of how cash might flow into and out of a business. This may be sent out in a chart or graph.

Question 7

Cash Surplus

Answer 7

A situation when the cash inflow is greater than the cash outflow.

Question 8

Cash Deficit

Answer 8

A situation when a business finds itself short of cash because the outflow is greater than the inflow.