IB Docs (2) Team
3.7 Cash flow - Question bank
Unit 3.7 Cash flow - Question bank
Test your understanding of this topic in the IB Business Management syllabus by answering these 20 questions. This is a "dynamic quiz", so feel free to revisit this page regularly as the questions are updated each time you take this quiz. There are over 60 questions for this topic in the question bank.
Fill in the missing parts in the following text:
Advances (borrowed funds) from a financial lender, such as a bank, repayable within 12 months.
Which of the following is not a cash inflow for a business?
Dividend payment to shareholders is a cash outflow for a business, rather than cash inflow. The other options are all sources of cash inflow for a business.
Fill in the missing parts in the following text:
Also known as net current assets, this refers to the cash or other liquid assets available to an organization for its daily operations, such as paying for raw materials, utility bills and staff wages.
Fill in the missing parts in the following text:
The short-term assets (belongings) of an organization that can be relatively easy to convert into cash, i.e. cash, stocks (inventory), and debtors.
Fill in the missing parts in the following text:
Also known as net current assets, this refers to the cash or other liquid assets available to an organization for its daily operations, such as paying for raw materials, utility bills and staff wages. -
Fill in the missing parts in the following text:
Also known as working capital, this is shown on a balance sheet to reveal the liquidity position of a business, this is found by using the formula: Current assets – Current liabilities.
Type in the key term from the definition below:
The sums of money paid out by a business for its production or operational costs during a given period of time.
Cash outflows
Which of the following describes insolvency?
Insolvency is a situation where a business has little or no cash so cannot pay its outstanding debts, even if it is profitable.
Fill in the missing parts in the following text:
The value of goods and/or services sold to customers. It is calculated using the formula: Price × Quantity.
Fill in the missing parts in the following text:
Also known as inventories, these are the goods that a business has available for sale, per time period. They are intended to be sold as quickly as possible, to generate cash for the business.
Fill in the missing parts in the following text:
Also known as working capital, this is shown on a balance sheet to reveal the liquidity position of a business, this is found by using the formula: Current assets – Current liabilities.
What is the impact of an increase in the value of debtors at the end of an accounting period?
Bank loan repayments will be recorded as a cash outflow in a cash flow statement for a business as this represents cash leaving the business.
Type in the key term from the definition below:
The amount of cash held by a business at the end of each trading month. This amount of cash becomes the opening cash balance for the following month.
Closing balance
Fill in the missing parts in the following text:
Also known as a cash flow problem, this issue occurs when there is a lack of cash in the organization because its cash inflows are less than its cash outflows, i.e. it experiences negative net cash flow.
Which statement below is incorrect?
The payment of rent, wages and salaries are all examples of cash outflows (not cash inflows) as money leaves the organization.
Fill in the missing parts in the following text:
The movement of money in and out of an organization.
Fill in the missing parts in the following text:
The numerical difference between an organization’s total cash inflows and its total cash outflows, per time period. The formula to calculate this is: Cash inflows – Cash outflows.
What is the period of time which elapses between the point at which cash begins to be spent on the production of a product and the collection of cash from a customer?
The working capital cycle is the period of time between payment for goods supplied to a business and the business receiving cash from its customers. It shows the movement of cash into and out of the business. It is desirable for the working capital cycle to be short.
How is working capital calculated?
Working capital is the money needed to pay for the day-to-day running costs of a business, such as wages, utilities and raw materials. It is calculated by subtracting current liabilities from current assets.
Fill in the missing parts in the following text:
This occurs when a debtor is unable to pay outstanding invoices to the business. The result is it reduces the cash inflows for the vendor (seller).
Return to the Unit 3.7 Cash flow homepage
Return to the Unit 3 Finance and accounts homepage
Twitter
Facebook
LinkedIn