students zone

Chapter 3 - Muliple-choice questions

1. Positive cash flow is:
   1.   ?    cash flowing into the business
   2.   ?    cash flowing out of the business
   3.   ?    payments made to suppliers
   4.   ?    money taken out of the business by the owner
2. If more cash has come in than has gone out, it is known as:
   1.   ?    a profit
   2.   ?    a cash deficit
   3.   ?    a negative cash flow
   4.   ?    a cash surplus
3. Constructing a cash flow forecast is:
   1.   ?    a method for ensuring control
   2.   ?    a valuable planning exercise
   3.   ?    a way of increasing capital
   4.   ?    a way of recording what the business owes
4. If a business anticipates a cash deficit, it can improve the position by:
   1.   ?    not collecting any money from its customers
   2.   ?    delaying any payments it has to make
   3.   ?    making all payments as soon as possible
   4.   ?    withdrawing any money it has in the bank
5. If the business trades on credit, the money owed by customers should be entered into the cash flow forecast:
   1.   ?    when the sales are expected to be made
   2.   ?    the month after the sales are expected to be made
   3.   ?    when it is expected the customers will pay
   4.   ?    at the end of the accounting period
6. A cash flow statement shows
   1.   ?    the predicted cash inflows and outflows
   2.   ?    the predicted cash position at the end of the accounting period
   3.   ?    when cash is expected to be received or paid
   4.   ?    when cash has been received or paid