Which of the following is an inflow of cash?
Answer 'C' (the sale of the firm's bonds) would be considered an inflow of cash, since upon the sale, cash would be received. The remaining options (purchase of a new factory, the retirement of the firm's bonds, and funds spent in normal business operations) are all considered to be outflows of cash.
Cash inflow is the money going into a business which could be from sales, investments, or financing. It's the opposite of cash outflow, which is the money leaving the business.
Taking on new debt (short-term or long-term) results in a cash inflow; repaying existing debt requires a cash outflow. Similarly, the sale of stock generates a cash inflow; whereas the repurchase of stock or payment of cash dividends results in a cash outflow.
In simple terms, the term cash outflow describes any money leaving a business. Obvious examples of cash outflow as experienced by a wide range of businesses include employees' salaries, the maintenance of business premises and dividends that have to be paid to shareholders.
Examples of cash inflows are - Cash proceeds from issuing shares or other similar instruments, cash receipts from disposal of fixed assets including intangibles, cash receipts from sale of goods and rendering services.
Cash inflows refer to any money that enters your business. They come from a variety of activities, such as customer payments, borrowed funds, proceeds from selling assets, investment income, and grants or subsidies. Cash inflows focus on actual cash transactions.
Example of Cash Inflow
Here are a few examples: Sales Revenue: Money received from selling products or services. Customer Prepayments: Payments received in advance for goods or services to be delivered in the future. Loan Receipts: Funds received from bank loans or other financing sources.
- Sales revenue from products or services.
- Investments made in the business.
- Loans received from lenders.
- Accounts receivable from customers who owe you money.
- Grants or subsidies received from the government.
- Rental income from leasing out property or equipment.
- Revenue from customer payments.
- Cash receipts from sales.
- Funding.
- Taking out a loan.
- Tax refunds.
- Returns or dividend payments from investments.
- Interest income.
Answer and Explanation:
Correct answer: Option (d) Issuance of long-term debt.
What are the four example of inflow and outflow of cash?
Financing. Financing inflows and outflows refer to money moving into or out of the business from outside sources such as equity and venture capital investment, loans, stock sales, dividend payments, and debt payments.
Which of the following is NOT a cash outflow for the firm? depreciation.
cash inflows - all of the money coming into the business, which can be separated into different categories, for example sales, rent received and loans. cash outflows - all of the money moving out of the business to pay for its costs, for example suppliers, employees and overheads.
Explanation: Cash received from debtors is the only event that will result in cash inflow as cash withdrawal from banks is a cash management activity whereas issue of debentures to suppliers and issue of equity shares to preference shareholders will result only in the change in capital structure not in the cash flow.
Your cash inflows for the forecasting period: Anticipated sales receipts from within the forecasting period are usually the primary source of data for your cash inflows. Other types of cash inflows to consider including are intercompany funding, dividend income, proceeds of divestments, and inflows from third parties.
Cash inflows (proceeds) from investing activities include: Receipts from collections of loans (except program loans) and sales of other entities' debt instruments (other than cash equivalents) Receipts from sales of equity instruments and from returns of investment in those instruments.
Inflow of Cash Examples
Income from sales of your goods or services. The total amount you make from sales in a given period is known as your net sales figure, or your turnover. Returns on investments. Many business owners invest in assets or stocks as a means of maintaining a positive cash inflow.
It refers to the amount of cash businesses spend on operating expenses, debts (long-term), interest rates, and liabilities. Examples of cash outflow include salary paid to employees, dividends paid to shareholders, reinvestment in business, rent paid for office premises, and more.
Cash flow only refers to the money that flows in and out of your business within a specific time frame, whereas profit is what is left from your revenue once you've deducted your varying levels of costs (operational, taxes etc). It would be easy to mistake profit as the key indicator of how your business is doing.
Cash inflows refer to any money that enters your business. They come from a variety of activities, such as customer payments, borrowed funds, proceeds from selling assets, investment income, and grants or subsidies. Cash inflows focus on actual cash transactions.
Which of the following is considered a cash inflow in a cash budget?
Cash inflows typically consist of cash collections received from customers for current sales or collections on accounts receivable from prior sales. Cash inflows can also include funds received from debt financing the company may enter into with a lending institution.
- Revenue collected from customers.
- Interest income from loans.
- Dividend income (in cash received)
- Lawsuit cash awards received.
- Insurance proceeds received. ...
- Amount of cash from the sale of trading securities.
Since the unmet payment obligation represents a future economic benefit to the company, the accounts receivables line item is categorized as a current asset on the balance sheet. Why? The company anticipates receiving the owed payment in cash soon (“cash inflow”).
Since depreciation decreases operating income, but does not result in a cash outflow, it is added back to operating income to reconcile net cash provided from operating activities.
Examples: → Cash Expenses: Buying raw materials, paying wages, utility bills. → Non-Cash Expenses: Depreciation, amortization, stock-based compensation. Accounting Treatment: → Cash Expenses: Recorded as an expense on the Income Statement & Cash Flow Statement when incurred, impacting cash and expense accounts.
