Lesson 6.2.3

6.2.3 Cash Flow Forecast Quiz: NCFE Business & Enterprise, Unit 6

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

In partnership with Revision Ninja

A cash flow forecast predicts the money entering and leaving a business month by month. This lesson explains inflows, outflows, net cash flow, opening and closing balances, how a forecast differs from a cash flow statement, and what a business should do when the forecast shows a shortfall.

Key points

  • An inflow is cash arriving in the bank, such as takings from customers; an outflow is cash leaving, such as bills, wages and business rates.
  • Net cash flow for a month is total inflows minus total outflows, and it can be positive or negative.
  • Closing balance equals opening balance plus net cash flow, and each month's closing balance becomes the next month's opening balance.
  • A forecast predicts future cash and may prove wrong, while a cash flow statement records cash that has already moved.
  • A balance can stay positive even in a month of negative net cash flow if enough cash was brought forward.
  • Several months of negative net cash flow can leave a firm unable to pay its bills, even if it is profitable on paper.
  • Spotting a shortfall early gives time to arrange an overdraft, chase customers or delay purchases before the cash runs out.

Key terms

Cash inflow
Money coming into the business, for example payments received from customers.
Cash outflow
Money leaving the business, such as rent, wages or supplier payments.
Net cash flow
Total cash inflows minus total cash outflows for a period.
Opening balance
The cash held at the start of a month, equal to the previous month's closing balance.
Closing balance
The cash left at the end of a month: opening balance plus net cash flow.
Cash flow forecast
A prediction of expected receipts and payments for each coming month.
Cash flow statement
A factual record of the cash that actually entered and left the business.

Host it live on the board and students join with a game code on their own devices, or revise alone with Free Play. The answers are revealed in the game.

Host this setFree Play

The 20 questions

  1. What two main categories of financial items are shown on a balance sheet?

    • Inflows and outflows
    • Revenue and expenses
    • Receipts and payments
    • Assets and liabilities

  2. What components make up capital employed on a balance sheet?

    • Current assets minus liabilities
    • Equity plus non-current liabilities
    • Total assets minus revenue
    • Share capital plus reserves

  3. Which of these is classified as a non-current asset on a balance sheet?

    • Delivery van
    • Bank cash
    • Inventory stock
    • Trade receivable

  4. Which item is typically listed under current liabilities on a balance sheet?

    • Trade payables
    • Bank mortgage
    • Share capital
    • Delivery van

  5. What does the share capital figure represent on a statement of financial position?

    • Current liabilities
    • Money raised from shares
    • Retained earnings
    • Long-term bank loans

  6. A bank loan repayable in five years appears under which heading?

    • Non-current liabilities
    • Shareholders' equity
    • Current liabilities
    • Non-current assets

  7. What financial term describes the total value of all assets minus all liabilities?

    • Net assets
    • Fixed capital
    • Working capital
    • Gross profit

  8. What specific point in time does a balance sheet report financial position?

    • One financial year
    • One particular day
    • A three-month quarter
    • Five consecutive years

  9. Share capital plus retained profit adds up to which balance sheet total?

    • Long-term liabilities
    • Capital employed
    • Shareholders' equity
    • Working capital

  10. Why do both sides of a balance sheet always equal the same total?

    • Assets equal claims
    • Profit equals cash
    • Revenue equals costs
    • Equity equals debt

  11. Where on a Statement of Financial Position would you find a five-year bank loan?

    • Non-current assets
    • Non-current liabilities
    • Owners' capital
    • Current liabilities

  12. Which section of a Statement of Financial Position lists items the firm expects to turn into cash within twelve months?

    • Current assets
    • Owners' capital
    • Current liabilities
    • Non-current assets

  13. Which of these items is a common example of a current liability?

    • Retained profit
    • Factory building
    • Long-term mortgage
    • Bank overdraft

  14. Ravi puts £20,000 of his own savings into his business. Where will this appear on the Statement of Financial Position?

    • Non-current liabilities
    • Owners' capital
    • Non-current assets
    • Current liabilities

  15. Which item listed below is NOT classed as a non-current asset?

    • Equipment
    • Inventory
    • Machinery
    • Property

  16. Which equation underpins the Statement of Financial Position?

    • Capital = Assets + Liabilities
    • Assets = Liabilities + Capital
    • Liabilities = Assets + Capital
    • Assets + Liabilities = Capital

  17. Which term describes a firm's total long-term funding of equity plus non-current liabilities?

    • Capital employed
    • Working capital
    • Net assets
    • Retained profit

  18. A shop has current assets of £40,000 and current liabilities of £15,000. What is its working capital?

    • £15,000
    • £55,000
    • £40,000
    • £25,000

  19. Where on the Statement of Financial Position are amounts owed to suppliers for credit purchases recorded?

    • Current assets
    • Non-current liabilities
    • Share capital
    • Current liabilities

  20. A van's original cost minus the depreciation charged to date gives which figure in the Statement of Financial Position?

    • Net realisable value
    • Net book value
    • Replacement cost
    • Historical cost

All NCFE Business & Enterprise quizzes