The difference between total receipts and total payments is referred to as A

Business Dec 10, 2020

The difference between total receipts and total payments is referred to as

A. cumulative cash flow.

B. beginning cash flow.

C. net cash flow.

D. cash balance.

Expert Solution

The difference between total receipts and total payments is referred to as C. net cash flow.

The net cash flow during a given period is given by:

=Total cash receipts - total cash payments=Total cash receipts - total cash payments

The total cash receipts may be from different sources such as collections from customers, returns from the investment made in financial assets, or sale of scrapped assets. Similarly, the total cash payments may be for various purposes, such as investment in fixed assets, payments to the suppliers, or the dividends to the shareholders.

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