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1.3 Putting a business idea into practice

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Question 10

Nova Bags makes a £9,000 profit but has a negative closing cash balance. Which conclusion is most accurate?

[1]
A

The business may be profitable yet face insolvency if cash is unavailable when payments fall due

B

The profit figure proves the negative cash balance is a forecasting error

C

The business must have sold below break-even because its closing balance is negative

D

The business can pay suppliers by transferring the accounting profit directly to its bank account

Markscheme

1.3 Putting a business idea into practice Questions

  1. GCSE
  2. /Business
  3. /1.3 Putting a business idea into practice

38 exam-style questions on Edexcel GCSE Business 1.3 Putting a business idea into practice, covering 1.3.1a Financial aims and objectives, 1.3.1b Non-financial aims and objectives, 1.3.1c Why aims and objectives differ, 1.3.2a Revenue, costs and profit calculations, 1.3.2b Break even and margin of safety, 1.3.2c Interpretation of break even diagrams, 1.3.3a The importance of cash to a business, 1.3.3b The difference between cash and profit, 1.3.3c Cash-flow forecasts: inflows and outflows, 1.3.3d Cash-flow forecasts: net cash flow and balances, 1.3.4a Short-term sources of finance, and 1.3.4b Long-term sources of finance. Each one has a worked solution and a mark scheme showing where the marks go.

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