Which of the following is an essential characteristic of an expense?
A) Decreases in future economic benefits
B) Contribution to owners
C) Increases in assets or reduction in liabilities
D) Increase in future economic benefits

Question

Quizplus · Accepted Answer

An expense is an outflow of economic resources (such as cash) to generate revenue or other benefits for a business. As a result, it decreases future economic benefits for the company. Choices B and C are incorrect because expenses do not contribute to owners or increase assets/reduce liabilities. Choice D is incorrect because an increase in future economic benefits would be considered a revenue, not an expense.

Which of the Following Is an Essential Characteristic of an Expense