What is the value of cash left in a business at the end of the month, calculated as opening balance plus net cash flow?

• A. Liquidity
• B. Expenses
• C. Closing balance
• D. Cash flow forecast

Answer: (C)

The ending cash on hand is the closing balance. It comes from the opening cash balance plus the net cash flow for the period (cash inflows minus cash outflows). So, the final amount reflects what cash the business actually has left at the end of the month. For example, start with 5,000 in cash and have a net cash flow of -1,200, you’d end with 3,800. This ending figure is different from liquidity, which looks at the ability to pay short-term obligations; expenses are cash outflows that reduce cash but aren’t the final cash total; and a cash flow forecast is a planned projection of inflows and outflows, not the actual ending cash.