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Learn: Cash Inflows and Cash Outflows
AQA GCSE Business 8132
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Welcome!You've already learned a lot about finance, including cash flow and its importance. Today, we'll focus on spotting cash inflows and cash outflows in a business. Let's get started!
What are Cash Inflows and Cash Outflows?Cash inflows are the money coming into a business, such as sales revenue, loans, or investments. Cash outflows are the money going out, like paying for raw materials, wages, or rent. Understanding them helps businesses manage their finances effectively.
Which of the following is an example of a cash inflow?
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Examples of Cash InflowsCommon cash inflows include revenue from selling products, loans from banks, investments from shareholders, and government grants. These are critical for maintaining liquidity and funding operations.
Revenue from product sales is an example of a {{blank0}} inflow, while paying for raw materials is a {{blank1}} outflow.
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Examples of Cash OutflowsCash outflows include payments for wages, rent, utilities, raw materials, and taxes. Managing these is crucial to prevent cash flow problems.
Match the items on the left with their correct pairs on the right
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Why Do Cash Inflows and Outflows Matter?Businesses need to balance inflows and outflows to ensure they have enough cash to cover expenses. Poor cash flow can lead to serious problems, like inability to pay bills or employees.
What could happen if cash outflows exceed inflows for a long time?
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Review Time!Great work! You've learned about cash inflows and outflows and their importance. Let's review with a few questions to test your understanding.
Which of the following are examples of cash inflows? (Select all that apply)
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Paying wages is a cash {{blank0}}, while receiving money from a loan is a cash {{blank1}}.
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Match the items on the left with their correct pairs on the right
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A business receives £5,000 from product sales and pays £3,000 for raw materials. What is the net cash flow?
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