Payment to liquidate an obligation other than repayment of debt principal.

Payment to liquidate an obligation other than repayment of debt principal.

• A. Outlay
• B. Revenue
• C. Deficit
• D. Discretionary Spending

Answer: (A)

In budgeting terms, an outlay is a cash disbursement that settles an obligation. When the government pays to fulfill a commitment—such as paying a supplier, contractor, or program—this cash exit is an outlay. The question describes a payment that liquidates an obligation other than repayment of debt principal, which still falls under the general idea of an outlay, since it is a cash disbursement to satisfy a obligation. Revenue is money received, not a payment to settle obligations. A deficit is the shortfall between outlays and revenues, not a type of payment. Discretionary spending refers to the portion of outlays subject to annual appropriations, not the act of liquidating obligations itself. So the best answer is outlay.

In budgeting terms, an outlay is a cash disbursement that settles an obligation. When the government pays to fulfill a commitment—such as paying a supplier, contractor, or program—this cash exit is an outlay. The question describes a payment that liquidates an obligation other than repayment of debt principal, which still falls under the general idea of an outlay, since it is a cash disbursement to satisfy a obligation. Revenue is money received, not a payment to settle obligations. A deficit is the shortfall between outlays and revenues, not a type of payment. Discretionary spending refers to the portion of outlays subject to annual appropriations, not the act of liquidating obligations itself. So the best answer is outlay.