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These are the monthly cash flow figures for a business - Edexcel - GCSE Business - Question 1 - 2016 - Paper 1

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These are the monthly cash flow figures for a business. Opening balance £10 000 Cash inflow £14 000 Cash outflow £28 000 What is the closing balance for the busines... show full transcript

Worked Solution & Example Answer:These are the monthly cash flow figures for a business - Edexcel - GCSE Business - Question 1 - 2016 - Paper 1

Step 1

Calculate the closing balance

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Answer

To find the closing balance, use the formula:

extClosingBalance=extOpeningBalance+extCashInflow−extCashOutflow ext{Closing Balance} = ext{Opening Balance} + ext{Cash Inflow} - ext{Cash Outflow}

Substituting the values:

extClosingBalance=£10000+£14000−£28000 ext{Closing Balance} = £10 000 + £14 000 - £28 000

This simplifies to:

extClosingBalance=£24000−£28000=−£4000 ext{Closing Balance} = £24 000 - £28 000 = -£4 000

Therefore, the closing balance for the business is £4 000 in the negative.

Step 2

Select one answer

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Answer

Based on the calculation, the correct answer is B - £4 000.

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