Difference between cash and profit

1
Difference between cash and profit

• Cash is considered cash and cheques
• Its 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
• Its 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 its different to cash flow