The actual remaining cash after debt service is known as:

• A. Cash flow
• B. Net income
• C. Reserves
• D. Working capital

Answer: (A)

Cash flow is the actual cash you have left after paying all cash expenses, including debt service (principal and interest). It shows real liquidity—the money available to reinvest, set aside as reserves, or distribute. This is why it’s the correct term for the “actual remaining cash after debt service.” Net income, by contrast, is an accounting profit that includes non-cash items like depreciation and doesn’t necessarily reflect cash on hand. Reserves are funds set aside, not the immediate cash left after debt obligations. Working capital measures short-term liquidity on the balance sheet (current assets minus current liabilities) and isn’t specifically about cash remaining after debt service. For example, if cash inflows are 150,000, operating expenses 100,000, and debt service 30,000, the cash flow after debt service is 20,000.