A cash-flow statement for a retail business would include which of the following?
(A) Cash sales
(B) Credit purchases
(C) Credit sales
(D) Receivables - HSC - SSCE Business Studies - Question 13 - 2003 - Paper 1
Question 13
A cash-flow statement for a retail business would include which of the following?
(A) Cash sales
(B) Credit purchases
(C) Credit sales
(D) Receivables
Worked Solution & Example Answer:A cash-flow statement for a retail business would include which of the following?
(A) Cash sales
(B) Credit purchases
(C) Credit sales
(D) Receivables - HSC - SSCE Business Studies - Question 13 - 2003 - Paper 1
Step 1
Cash sales
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Answer
Cash sales refer to transactions where payment is made immediately in cash. These are a key component of a cash-flow statement since they directly impact the cash inflows of a business.
Step 2
Credit purchases
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Answer
Credit purchases indicate transactions where payment is delayed, affecting accounts payable rather than immediate cash outflows. Therefore, they are not included in the cash-flow statement.
Step 3
Credit sales
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Answer
Credit sales represent sales made on credit where payment is expected later. While they do affect receivables, they do not contribute to immediate cash inflow and are thus not included.
Step 4
Receivables
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Answer
Receivables are amounts owed by customers for credit sales. Similar to credit sales, they do not constitute immediate cash inflows for the period and are not central to the cash-flow statement.
