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Cash inflows/receipts

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Finance

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20 Terms

1

Cash inflows/receipts

-The money coming into the business

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2

-Money flows into the business when income is received.

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3

Cash outflows/payments

-The money going out of the business

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4

-Money flows out of a business when payments are made.

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5

Cash sales

when customers paid for it at the time of the purchase

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6

Credit sales

paid for the products however it takes time for it to be paid for

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7

Value added tax

Value Added Tax is charged on most goods and services. A business must be registered for VAT if its sales go over the VAT threshold (£82 000 in 2015). The business adds VAT to the cost of its goods and services.

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8

Cash flow forecast

a prediction of the expected cash balance at the end of each month in the future

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9

Opening balance

the amount of cash the business has the start of the month

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10

Total cash inflow

the total cash the business expect to receive during the month

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11

Total cash outflow

the amount of cash the business expects to spend during the month

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12

Inflow-outflow

the difference between the cash coming in and out of the business

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13

Closing balance

the opening balance + the difference between the cash coming in and the cash coming out.

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14

Purchase of assets

These are small and large expenditures on items, from computer printers and telephones to vehicles and expensive machinery and buildings

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15

Rent, rates, salaries, wages and utilities

These are all regular outflows. The business must have the cash to cover these.

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16

Cash and credit purchases

Anything a business buys is an outflow whether it is for use by the business or resale, e.g. raw materials, stationery.

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17

loan outflow

Money borrowed by the business from an external source

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18

capital introduced

Funds invested in the business by the owner or shareholders

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19

sales of assets

Money received from selling an asset, e.g. machinery

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20

bank interest received

the business may store money in a savings account on which the bank will pay interest

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