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GCSE Business · key term
Money available to a business as notes, coins or money in its bank account.
Used by AQA, Edexcel and OCR
Paper 2
Revise: Cash Flow ForecastingCash is money available as notes, coins or money in a bank account. Businesses need it to pay employees, buy stock, pay rent and utility bills, and meet unexpected expenses such as replacing broken equipment. These payments have deadlines: a business cannot simply wait until it becomes more successful before paying them.
Specification 1.3.3 · Paper 1
Money immediately available to a business to make payments, including money in its bank account.
Keep net cash flow separate from the closing balance: one measures the change during the month; the other shows the cash position at the end.
Record cash when it is expected to be received or paid, not necessarily when a sale or purchase takes place.
A loan received is a cash inflow, not sales revenue or profit.
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Cash is money a business can use immediately to make payments. It includes money available in its bank account, not just notes and coins. Money that customers still owe the business is not yet available cash.
Paper 2
Money available to a business to pay for things, including notes, coins and money available in its bank account.
Revise: Importance of CashCash is the money a business has available to pay for things. It includes notes and coins, but also money available in its bank account. A business paying its employees by bank transfer is using cash even though no physical money changes hands.
Money a business holds as notes, coins and available funds in its bank account.