Anna is not wealthy. Her retail business had an opening cash balance of £500, she paid £15,000 cash into the bank, paid staff wages of £3,200 cash, paid sundry expenses of £800 cash, paid the window cleaner £200 cash, paid a repair man £2,000 cash and had £800 left on hand at the end of the year. Anna did not take any cash drawings.
Which of the following is most likely to be correct?

Question

Quizplus · Accepted Answer

Anna's total cash outflow is £15,000 (bank) + £3,200 (wages) + £800 (expenses) + £200 (window cleaner) + £2,000 (repair man) = £21,200. Starting with £500 and ending with £800, the total cash inflow must cover the outflow and the ending balance, which is £21,500 (£21,200 + £300 net change in cash). This matches the cash sales figure, suggesting she made £21,500 in cash sales.

Anna Is Not Wealthy