What this practice covers
These questions are drawn from past CIE 0264 Business papers and filtered to cash flow forecast. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
Start practising practice questions →
What examiners see students get wrong here
These are the errors that cost marks on cash flow forecast, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Treating the forecast as a statement of profit or loss. It records money moving, never gross profit, and a machine appears in full in the month it is paid for.
- Putting a credit sale in the month it was made instead of the month it is paid for.
- Adding the net cash flow of every month together to get the closing balance, instead of carrying the closing balance forward as the next opening balance.
- Forgetting the sign. A net cash flow of -$12,000 is subtracted from the opening balance, not added.
- Changing one figure after an amendment and leaving the later months alone.
- Saying a negative closing balance means the business is making a loss. It means the account is overdrawn.
- Answering "how could the problem be solved" with "sell more" or "cut costs". Those are long-term aims, not ways of moving cash into the month where it is short.
- Recommending a bank loan for a one-month gap, then paying interest on it for years.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Cash flow forecast revision notes.