Which statement best describes an authorized disbursement?

An authorized disbursement is defined as a payment made on behalf of, and at the written direction of, all principals involved in a transaction. This emphasizes the importance of having a clear and documented agreement among all relevant parties before any funds are transferred. It reflects the principle of accountability and transparency in financial dealings, ensuring that disbursements are made in accordance with the wishes and consent of those who have a stake in the matter.

The emphasis on written direction highlights the necessity of documentation which safeguards against potential disputes or misunderstandings regarding the use of funds. This element of authorization is crucial in ensuring that all parties involved have a say and agree to the transaction, thereby protecting their interests.

Other options may suggest scenarios that do not align with the commonly accepted definition of an authorized disbursement. For instance, discretionary payments by the broker lack this crucial element of joint approval, while requiring court approval limits the applicability of disbursements found in ordinary transactions. Additionally, stipulating that disbursements must be strictly in cash does not encompass the broader range of payment methods that may be utilized under an authorized disbursement.