What is a cash payment made for?

A cash payment made refers to the actual transfer of money to settle a liability or expense. In the context of business transactions, cash payments are commonly made to settle debts or obligations, such as payments to suppliers or creditors for goods or services received.

Option B, referring to cash paid to creditors, is correct because it directly reflects a cash outflow used to fulfill financial commitments. This payment demonstrates a reduction in liabilities on the balance sheet, showcasing responsible financial management and maintaining good relationships with suppliers.

The other choices involve different financial transactions. Income earned from investments represents revenue but does not pertain to cash outflows. Cash received from goods sold denotes cash inflows rather than payments made. Rent received from tenants also signifies income rather than a payment, focusing on funds coming into the business rather than going out. Thus, option B distinctly identifies the nature of cash payments in a business context.