What is primarily described by the term "expenditure"?

Study for the BTEC Business – Personal Finance Exam. Test your knowledge with interactive quizzes and insightful explanations. Prepare effectively and excel in your exam!

The term "expenditure" primarily refers to the costs and expenses incurred by a business in the course of its operations. This encompasses a wide range of outflows of cash that are necessary for the maintenance and growth of the business, including payments for materials, labor, overhead, rent, utilities, and more.

When a business makes expenditures, it is utilizing its financial resources to fund various activities that support its operational objectives. Understanding expenditures is crucial for effective budget management, financial planning, and overall business strategy, as they directly impact profitability and cash flow. By analyzing expenditures, businesses can identify areas where they may reduce costs or improve efficiency to enhance their financial standing.

The other options relate to different financial concepts: income from sales is revenue related to business operations, money from investors refers to financing activities, and profit remaining after expenses describes net income, a measure of profitability rather than expenditure.

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