What Is Cash Flow? - Definition, Calculation & Example

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

What is the best explanation of cash flow?

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1. What's the difference between negative cash flow and positive cash flow?

2. As the CFO of Acme Machinery, Kay is concerned that their cash flow is being impacted by the amount of money they are spending on expensive pieces of equipment. Should Kay look at their free cash flow or net cash flow, and why?

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About This Quiz & Worksheet

Cash flow is an important component of accounting, and this quiz/worksheet will help you test your understanding of its meaning and application.

Quiz & Worksheet Goals

In these assessments you'll be tested on several aspects of cash flow, including:

  • The financial statement on which cash flow is reported
  • Calculating cash flow
  • How a company generates cash flow
  • Positive and negative cash flow
  • The definition of cash flow

Skills Practiced

This quiz and worksheet allow students to test the following skills:

  • Defining key concepts - ensure that you can accurately define cash flow
  • Distinguishing differences - compare and contrast positive and negative cash flow
  • Information recall - access the knowledge you've gained regarding the financial statement on which cash flow is reported as well as how a company generates cash flow
  • Problem solving - use acquired knowledge to solve a practice problem involving the calculation of cash flow

Additional Learning

To learn more about Cash flow, review the accompanying lesson, What is Cash Flow? - Definition, Calculation and Example. This lesson covers the following objectives:

  • Define cash flow
  • Differentiate between positive and negative cash flow
  • Know what a cash flow statement is
  • Understand what free cash flow measures
  • Calculate cash flow
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