Cash Disbursement

A cash disbursement is any payment made by a business using cash or cash equivalents (like checks, debit, or electronic transfers) to settle obligations such as paying suppliers, salaries, utilities, rent, or loan repayments.

Characteristics:

• Recorded in a company’s cash disbursement journal.

• Impacts the cash flow statement under operating, investing, or financing activities.

• Includes both operating expenses and capital expenditures.

Example:

When a business pays AED 10,000 in rent for its office premises, it records a cash disbursement of AED 10,000 under operating activities.