Future Business Leaders of America (FBLA) Agribusiness Practice Test

What does disbursement mean in a business context?

1. Funds received from investments

2. Funds paid out to cover expenses

3. Funds saved for future use

4. Funds allocated for marketing

The correct answer is: Funds paid out to cover expenses

Disbursement in a business context refers specifically to the act of paying out funds to cover various expenses incurred by the business. This can include payments for operational costs, salaries, bills, and purchasing inventory. It represents the flow of cash out of the business, indicating financial management practices related to expense handling. In contrast, the other options involve different financial activities. Receiving funds from investments pertains to income generation and capital inflow, while funds saved for future use relate to budgeting and financial planning for future expenses. Allocating funds for marketing concerns the budgeting process but specifically narrows it down to marketing expenditures rather than general expenses. Thus, the primary definition of disbursement aligns clearly with the concept of funds being paid out, making that answer the most accurate in this context.