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!

Practice this question and more.

Which of the following is an example of a cash outflow?

Sales of goods
Repayment for loans
Collecting accounts receivable
Receiving investments

The correct answer is: Repayment for loans

The correct choice highlights that repayment for loans is an example of a cash outflow. In financial terms, a cash outflow refers to any money that exits a business or organization. When a company repays a loan, it is returning borrowed funds to a lender, reducing its cash balance. This transaction directly impacts the company’s cash flow by decreasing available funds. Conversely, the other options represent inflows or financial activities that do not involve an immediate outlay of cash. Sales of goods generate revenue, hence they are cash inflows; collecting accounts receivable signifies that previous sales are converted into cash, which also reflects an inflow. Receiving investments represents additional funding entering the business rather than money being paid out. Understanding the distinction between cash inflows and outflows is crucial for managing a business's financial health effectively.