Future Business Leaders of America (FBLA) Agribusiness Practice Test

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Enhance your FBLA Agribusiness knowledge with our comprehensive test. Dive into flashcards and multiple-choice questions, complete with hints and explanations, to ensure exam success. Prepare confidently for a bright future!

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From which activity does cash outflow typically arise?

Sales revenue generation
Loan repayments
Raising capital through stock sales
Collecting accounts receivable

The correct answer is: Loan repayments

Cash outflow typically arises from loan repayments because this involves the outflow of cash to settle debts that a business has incurred. When a business borrows money, it creates a liability that must be repaid over time, often with interest. Each payment made on a loan reduces the company's available cash, representing a clear cash outflow. In contrast, the other activities listed involve cash inflows. Sales revenue generation means the business is earning money, which increases cash flow. Raising capital through stock sales also brings cash into the business, while collecting accounts receivable involves receiving payment from customers for past sales, again resulting in cash coming in, not going out. Therefore, loan repayments distinctly represent a scenario where cash flows out of the business.