In Very Simple Terms, a Cash Flow Forecast

question 15

Multiple Choice

In very simple terms, a cash flow forecast:

• A) Traces the expected expenses of a business on a semi-annual basis.
• B) Traces the cost of borrowing over the term of the debt.
• C) Traces the expected flow of funds into and out of a business over some period of time.
• D) Traces the amount of interest earned by a business when customers use credit cards to pay for their merchandise.

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Definitions:

Business Owned

Refers to entities such as companies or enterprises that are possessed and controlled by one or more persons or other businesses.

Economic Entity Assumption

An accounting principle that treats a business as separate from its owners, allowing for independent financial statements.

Personal Living Expenses

Costs associated with daily living, including food, housing, transportation, and entertainment.

Cost

The amount of money required to purchase something or the expense incurred to produce something.