If the opening cash balance at the beginning of the month is $27,500,total cash inflows for the month are $38,000 and total cash outflows are $78,000 the opening cash balance at the beginning of the next month is:

Question

Quizplus · Accepted Answer

The total cash inflows of $38,000 minus total cash outflows of $78,000 result in a net cash outflow of -$40,000. When this net outflow is subtracted from the opening cash balance of $27,500, the result is a closing cash balance of $12,500 in deficit. Therefore, the opening cash balance at the beginning of the next month is $12,500 in deficit (Choice C).

If the Opening Cash Balance at the Beginning of the Month