What are royalties primarily used for?

Royalties are primarily payments made to the owner of an intangible asset for the ongoing use of that asset. This often includes things like copyrights, patents, trademarks, and natural resources. The payment represents compensation for the rights granted to use the property, which distinguishes it from other financial activities like labor services or debt settlement.

In the context of assessing royalties, option B is correct as it accurately describes the nature of these payments. Royalties are not typically associated with labor services or settling debts, which involve different financial transactions altogether. Additionally, they do not pertain to covering insurance premiums, as that relates to risk management rather than the use of intellectual property or resources.