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Income and expenditure flow refers to the movement of money into and out of an entity, such as an individual, business, or government. Income represents the funds received, typically from sources like wages, sales, or investments, while expenditure encompasses the money spent on goods, services, and obligations. This flow is crucial for budgeting and financial planning, as it helps assess the entity's financial health and sustainability. Understanding this flow allows for better management of resources and informed decision-making.
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What is the net cash flow?
Net cash flow is the difference between income and expenditure.
Is credit income or expenditure?
Credit is neither an income or an expenditure. It becomes an expenditure when you use it. expenditure
What is between revenue and expenditure?
revenue is income and expenditure is an expense
Three key financial statements that corporations are required to prepare?
Statement of financial position ( Balance sheet) , Statement of Comprehensive Income ( Profit and Loss Account or Income and Expenditure account), Cash flow statement.
Where does cash at bank go in a income and expenditure account?
In an income and expenditure account, cash at bank is typically recorded under the "Income" section if it represents cash inflows from various sources, such as donations or revenue. However, it can also appear in the "Expenditure" section if it reflects cash outflows for expenses incurred. Ultimately, cash at bank serves as a measure of liquidity and financial position rather than a direct component of income or expenditure itself.
What is net flow?
Net cash flow is the difference between income and expenditure.
What is the net flow?
Net cash flow is the difference between income and expenditure.
How production flow income flow and expenditure flow in an economy are related to each other?
Production flow, income flow, and expenditure flow are interconnected components of an economy. Production flow refers to the creation of goods and services, which generates income for businesses and workers involved in the production process. This income is then spent on consumption, leading to expenditure flow, which stimulates further production. Thus, an increase in production leads to higher income, which in turn drives consumer spending, creating a continuous cycle that sustains economic activity.
What is the net cash flow?
Net cash flow is the difference between income and expenditure.
What does gross domestic product measure in circular flow diagram?
flow of money, total income, total expenditure
Why does aggregate income equal aggregate expenditure?
Aggregate income equals aggregate expenditure because, in an economy, every dollar spent on goods and services (expenditure) generates an equivalent dollar of income for someone (income). This relationship is rooted in the circular flow of income and expenditure, where households receive income from firms in exchange for labor and then spend that income on goods and services produced by those firms. Thus, total spending in the economy matches total income generated, ensuring that aggregate income and aggregate expenditure are equal.
Name the three phases in the circular flow of income?
The three phases of circular flow of income are; 1.production of goods and services 2.distribution or generation of income and 3.expenditure or disposition of income
Is credit income or expenditure?
Credit is neither an income or an expenditure. It becomes an expenditure when you use it. expenditure
What do you mean by income over expenditure or expenditure over income?
income over expenditure is profitexpenditure over income is loss
What are the injection into the circular flow of income?
injections into the circular flow of income are basically household consumers' net savings, net taxes and import expenditure. net savings from household consumers goes to the banks which in turn uses the money for investment expenditure(withdrawals) net taxes, goes to the govt which in turn uses it for government expenditure.(withdrawals) import expenditure goes abroad, and in turn uses it for export expenditure. Y= C + I + G + ( X-M)
Is it possible to have a negative net income and positive cash flow?
Yes and No. If the method of accounting followed is Mercantile, Yes. If the method of accounting followed is Cash System, No. In Mercantile method of Accounting, Negetive Income represents the excess of expenditure over income. In this method; Income and Expenditure considered are on accrual basis, i.e., income or expenditure is taken as such in the books of account; the moment a right to receive income or a liability to pay for expenditure has crytallised. The movement fo cash into the business or out of business is not the criteria. Therefore, inspite of a negative income in a particular year, a business may have a positive Cash flow on account of excess of cash flow arising out of previous years income, which is held as an asset in the form of Sundry Debtors, over the payments made in respect of previous years expenditure which is held as a liability in the form of Sundry Creditors on the balance sheet.
Why do cashiers use negative numbers?
They need to keep track of income and expenditure: that is, money coming in and money going out. Income is generally treated as a positive value and, since money going out is a flow in the opposite direction, it is given a negative sign so that income and expenditure can be combined.
