Expenses result when a business:
A) pays a supplier for goods purchased last month.
B) consumes resources during the production and sale of goods or services.
C) distributes money to owners.
D) hires employees.

Question

Quizplus · Accepted Answer

Expenses result from consuming resources during the production and sale of goods or services. Option A refers to accounts payable, which are liabilities incurred by a business when it purchases goods or services on credit. Option C refers to distributions or dividends paid to the owners, which are not expenses but rather a way of returning profits to the owners. Option D refers to wages and salaries paid to employees, which are considered expenses, but only if they relate to the production and sale of goods or services.

Expenses Result When a Business