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Difference between cash and profit

Difference between cash and profit. Cash is considered cash and cheques It’s a liquid asset of the business Cash is the inflow of money into the business bank account (actual money received, rather than what is ‘promised’) Cash also flows out of the business – e.g. paying suppliers bills.

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Difference between cash and profit

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  1. Difference between cash and profit • Cash is considered cash and cheques • It’s a liquid asset of the business • Cash is the inflow of money into the business bank account (actual money received, rather than what is ‘promised’) • Cash also flows out of the business – e.g. paying suppliers bills. • Not all bills are paid by cash – many are on credit terms

  2. Profit • This is measured by taking the costs away from the sales revenue • It’s different from cash because profit is the money earnt by the business, and is represented on paper (in the accounts) • Because sales can be made on credit terms, not just cash, then it’s different to cash flow

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