EM2964 - Examining Accounts: Example of Cash-Flow Tests
‘Minus Cash’ - Weeks 1 and 2
The taxpayer might claim that the overall deficit is only £20 which shows that it is the carry-over figure which is wrong. This is not the case because there is still an overall deficiency of £20. Is the carry forward figure wrong at the end of Week 2 as well(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
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Using the taxpayer’s suggested carry forward of £60 and assuming all Friday’s takings were available for banking and no cash was carried forward to Saturday, the result is
| £ | ||
| Cash available to Friday (£60 + £905) | 965 | |
| Cash used to Friday £800 + £168 | (968) | |
| Deficiency | (3) | |
| - A problem then arises for Saturday | £ | |
| Takings | 364 | |
| Own drawings | (180) | |
| Cash forward | (200) | |
| Deficiency | (16) |
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)