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Questions
What is meant by ‘Cash Flows’?
Short Answer Question
State the meaning of the term: Cash flows
Short Answer
Very Short Answer
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Solution 1
The amount of cash and cash equivalents coming in and out of the business of a company is termed Cash Flow.
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Solution 2
‘Cash Flows’ implies the cash movement in and out due to some non-cash items. Cash receipt from a non-cash item is termed a cash inflow, while a cash payment for such items is a cash outflow.
Examples of cash flows include the collection of cash from trade receivables, payment to trade payables, payment to employees, receipt of dividends, interest payments, etc.
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