BTEC Business – Personal Finance Practice Exam

The term that describes the cash coming into a business when income is received is "cash inflows." This refers specifically to the money that flows into the company from various sources, such as sales revenue, investments, or any other type of income. Cash inflows are essential for a business's operation, as they provide the funds necessary for expenses, investments, and growth.

The concept of cash inflows is crucial in financial management and accounting, as tracking these inflows helps businesses assess their financial health and determine their ability to meet obligations and reinvest in the business. Understanding cash inflows allows business owners to create effective budgets and cash flow forecasts, ensuring that they maintain sufficient liquidity to operate effectively.

In contrast, cash reserves refer to the amount of cash that a business keeps on hand for emergencies or unexpected expenses. Cash dividends are a distribution of a portion of a company's earnings to its shareholders, and cash surpluses refer to the excess cash that remains after all expenses and liabilities have been met. While these terms relate to financial management, they do not accurately describe the flow of income into a business as cash inflows do.