Quiz  /  Cash Flow Class 11 MCQ Questions With Answers

  • 1. 
    What is the formula used for a cash flow forecast?

  • [ Receipts - Payments = Net Cash Flow ] + Opening Balance = Closing Balance.
  • [ Receipts - Payments = Net Cash Flow ] - Opening Balance = Closing Balance.

  • 2. 
    What is the money available to pay for day to day operational costs called?

  • Cash
  • Working capital
  • Profit
  • All of the above

  • 3. 
    The closing bank balance is calculated by:

  • opening bank balance + cash out-flow
  • opening bank balance + cash in-flow
  • opening bank balance + net cash flow
  • net cash flow + gross profit

  • 4. 
    The monthly net cash flow for a business is calculated by:

  • sales revenue - cost of goods sold
  • total cash in - total cash out
  • total cash out - total cash in
  • total cash in - cost of goods sold

  • 5. 
    A firm is forecast to have a negative closing bank balance. Which would reduce the problem?

  • sell more goods on 4 months credit
  • produce more goods
  • ask customers to pay in cash and not sell goods on credit
  • ask suppliers if the firm can pay for goods in cash

  • 6. 
    Which of the following is NOT a use of cash-flow forecasts?

  • They indicate how much cash is available for paying bills
  • They show how much the bank needs to lend to stop insolvency
  • They indicate whether the business is holding too much cash
  • They indicate how much profit the business will make

  • 7. 
    What is net cash flow?

  • The difference between revenue and cost
  • The difference between money in and money out
  • The difference between assets and liabilities

  • 8. 
    Cash is not the same as profit. Why?

  • Cash may come from loans and investors, profit only comes from sales revenue
  • They are the same
  • Cash is used to pay the bills within a business
  • Cash flow stops a business from going bankrupt

  • 9. 
    If a cashflow forecast suggests that a firm will run out of cash, which would help the problem?

  • purchase more fixed assets
  • repay a bank loan
  • pay suppliers immediately
  • delay paying suppliers

  • 10. 
    Which one of the following is an example of an outflow?

  • Capital
  • Bank Loan
  • Wages
  • Government Grant

  • 11. 
    Which of these is NOT a goal of the cash flow forecast?

  • Start up a business
  • Run an existing business
  • Be 100% accurate
  • Keep the bank informed

  • 12. 
    The price of a product is $10, and the average total cost is $7. If the company produces and sells 25 units of the product, then what is their economic profit?

  • $2,500
  • $175
  • $75
  • $750

  • 13. 
    What is a cash flow statement?

  • A prediction of the enterprise cash flow over a period of time
  • A document based on guesses
  • An actual record of the enterprise cash flow over a period of time

  • 14. 
    How do you work out the enterprises ¨Total Outflow¨?

  • Take away all the forms of expenses from each other
  • Multiply all the forms of expenses together
  • Add up all the forms of expenses together
  • Add up all the forms of income together

  • 15. 
    How is it called when a Business runs out of cash?

  • Inflow
  • Insolvency
  • Insufficiency
  • Inaccuracy

  • 16. 
    A firm produces 500 units at a total cost of $2,000. What is their average total cost of production?

  • $4 per unit
  • $5 per unit
  • $3 per unit
  • $2 per unit

  • 17. 
    What means "cash flow as a liquid asset"?

  • That it assess a company's profitability.
  • That is immediately available for spending on goods and services.
  • That it includes all purchases of capital assets and investments in other business ventures.
  • That it represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.

  • 18. 
    Self Assessment: How confident do you feel about Cash flow?

  • Red
  • Amber
  • Green
  • All of above

  • 19. 
    How do you work out the enterprises ¨Total Inflow¨?

  • Take away all the forms of income from each other
  • Multiply all the forms of income together
  • Add up all the forms of expenses together
  • Add up all the forms of income together

  • 20. 
    How do you work out a months closing balance?

  • Multiply together the NCF and OB together
  • subtract the NCF from the OB
  • Add together the NCF and OB together
  • Add the total inflow and outflow together

  • 21. 
    What is a cash flow forecast?

  • A prediction of the enterprise cash flow over a period of time
  • A document based on facts
  • An actual record of the enterprise cash flow over a period of time

  • 22. 
    A company hires 3 workers for a day for $250 each, spends $400 on materials for the day, and pays a fixed daily rent of $100. What is the company's total cost for this day of operations?

  • $1,250
  • $750
  • $1,000
  • $1,150

  • 23. 
    Why is the cash flow forecast important?

  • To know if the business is holding too much cash that could be used in a more profitable way.
  • To know how much money ask the bank for.
  • To help the manger to know the available cash to pay/purchase.
  • All the above.

  • 24. 
    What did the business finish this cash flow statement with?

  • A profit of ...
  • 25,000.
  • -25,000
  • Both A & B

  • 25. 
    What is the relationship between a months ¨Closing balance¨ and the following months ¨Opening Balance¨?

  • They stay the same throughout the time period
  • The closing balance of a month is different to the opening balance of the next month
  • The closing balance of the month is the same as the opening balance for the next month (closing balance for Jan is the opening balance for Feb)
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