Chapter 22

Question 1

Cash flow

Answer 1

Cash inflows and outflows over a period of time.

Question 2

Cash flow forecast

Answer 2

Estimate of future cash inflows and outflows of a business, usually on a
monthly basis. This shows the expected cash balance at the end of each month.

Question 3

Working capital

Answer 3

Capital available to a business in the short term to pay for day-to-day expenses.

Question 4

Cash inflows

Answer 4

Sums of money received by a business during a period of time.

Question 5

Cash outflows

Answer 5

Sums of money paid out by a business during a period of time.

Question 6

Cash flow cycle

Answer 6

Shows the stages between paying out cash for labour, materials, etc., and
receiving cash from the sale of goods.

Question 7

Profit

Answer 7

Surplus after total costs have been subtracted from sales revenue

Question 8

Opening cash (or bank) balance

Answer 8

Amount of cash held by the business at the start of the month.

Question 9

Net cash flow

Answer 9

Difference, each month, between the inflows and the outflows.

Question 10

Closing cash (or bank) balance

Answer 10

Amount of cash held by the business at the end of each month. This
becomes the opening cash balance for the next month.