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Business Accounting by Jill Hussey, Roger Hussey (auth.)

By Jill Hussey, Roger Hussey (auth.)

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Sample text

If you have a job. draw up two lists; in the first. list financial information you come across at work and in the second financial information from outside your workplace. If you have read the newspapers, watched television or listened to the radio today, you will probably have received some financial news. This may have been on the state of the economy, the value of contracts won by well known companies or the pay of famous people. If you have done any shopping today, you will have compared prices and been given receipts which itemise and total your purchases.

18 A cash surplus is: a b c d the amount of money invested by the owner(s) the profit the business expects to make when more cash goes out than comes in when more cash comes in than goes out. 19 If 35% of sales are made on 2 months' credit and the total sales figure for January is £4,500: a b c d £1,575 £2,925 £1,575 £2,925 cash cash cash cash should should should should be be be be received received received received in in in in January February March March. 50 each are purchased in January with a 33% deposit to be paid in that month and the balance to be paid within 2 months, the balancing figure will be: a b c d £3,600 £3,600 £4,800 £4,800 in in in in March April March April.

Are the following statements true or false? 6 A cash deficit arises if more cash comes in than goes out. 7 A cash flow forecast can be used to decide whether the profit the business plans to earn is sufficient. 8 A cash flow forecast can be used to determine whether the business requires a loan. Financial Accounting 40 9 The cumulative cash flow figure is important only if it is negative. 10 Cash flows are best drawn up on a quarterly basis. You may wish to read more widely than this book to answer the following questions fully, but you can check the main points by referring to the appropriate sections in this chapter.

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