GCSE Business, Finance. Usually met in years 9 to 11.
Work through cash-flow forecasts: net cash flow, opening and closing balances, and the inflows needed to reach a target.
What you practise
Net cash flow
Opening and closing balances
Forecasts over two months
Starts with one month and builds to working backwards from a closing balance. Practice moves up a level when a round goes well and down when it does not.
Sample questions
Each sample comes with the method and the reason every wrong option is wrong. Real practice rounds are ten questions at your level.
Sample question, level 2 of 5
The opening balance is £500 and the net cash flow is £2,400. What is the closing balance?
£500
£2,900
£2,910
£5,300
£2,400
Show the answer and method
Answer: B, £2,900
The method: Closing balance = opening balance + net cash flow = £500 + £2,400 = £2,900.
Why the other options are wrong:
A, £500: That is the opening balance.
C, £2,910: Close, but check your working: this is a small slip away from the answer.
D, £5,300: The net cash flow is added once.
E, £2,400: That is the net cash flow. Add the opening balance.
Sample question, level 4 of 5
January: opening balance £500, inflows £1,700, outflows £1,500. February: inflows £2,900, outflows £1,900. What is the closing balance for February?
£2,200
£1,500
£700
£1,000
£1,700
Show the answer and method
Answer: E, £1,700
The method: January closes at £500 + £1,700 − £1,500 = £700. February opens there and closes at £700 + £2,900 − £1,900 = £1,700.
Why the other options are wrong:
A, £2,200: The opening balance is counted once, in January.
B, £1,500: February opens with January’s closing balance, not the January opening balance.
