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GCSE Business 2020-2022 OCR

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Question:

What is the Difference between Profits and Cash?

Author: eric_galvao



Answer:

-PROFITS are just the Main Source for Funds, in a Business -Revenues will become CASH INFLOWS, and Costs will just become CASH OUTFLOWS -What this means is that Profit is changed when a Sale has just been Made, but Cash is Changed when it has Received. So a Business with Credit will be making a Profit, but having no Cash -Profit can only be affected by Running Costs, but Cash is affected by Start Up, Running and Expansion Costs. If a Business buys an Asset, then only Cash is Affected


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