Home For AAT student members AQ 2013 AAT Level 3 (Level 6 in Scotland)
Current updates regarding coronavirus (Covid-19) and the precautions AAT are taking will be continually updated on the below page.

Please check this link for the latest updates:
We hope you are all safe and well and if you need us we will be here. 💚

CASH MANANGEMENT-Please help stuck on question

jo30jo30 Just JoinedRegistered Posts: 2
Please help exam monday. i get all figures correct but unsure weather my numbers should be positive or negetive within receipts and payments.

Question one-2.1 IN Revision 1

Question states "using your calculations from b and c compleate effect of changes to sale receipts and purchase payments. then it lists orginal net flow,changes in sales receipts, changes in purchases payments, revised net cash flow and opening balance and closing.

My question is changes in sales receipts are they always negetive (minis) and
purchase payments always postive.



  • Jo ClarkJo Clark Font Of All Knowledge Registered Posts: 2,525
    Hello Jo

    Is this question from one of the practice assessments?

    My advice is to read the guidance in the exam as it usually tells you whether to use a leading minus etc. when answering questions.

    JC :o
    ~ An investment in knowledge always pays the best interest ~
    Benjamin Franklin
  • NpsNps Experienced Mentor Registered Posts: 782
    I've only had chance to quickly read the question, but if I understand it correctly, you're asked to work out the cash flow, and then as you go though the question, you get amendments which affect the cash flows.

    So in answer to your question, the changes in sales receipts and purchase payments can be positive or negative. If you were expecting say £100 in month 2 but then your customers start taking longer to pay, you'd see your sales receipts decrease, but if you shortened their credit terms, you'd see sales receipts increase. The same happens with purchase payments, if your suppliers start reducing your credit terms, you'd see your cash outflows increase as you are paying your bills earlier than shown in the original forecast, but if they increased your credit period, your cash outflows would decrease.

    Obviously in both cases, the eventual cash flows are the same as ultimately you are still receiving the same amount of money, and paying out the same amount (just earlier or later than expected) but the point of cash flows is to show the monthly movements of the cash, so can go up or down in any particular month compared to the original forecast.
Sign In or Register to comment.