The cost of goods or services is called what?

• A. Credit
• B. Debt
• C. Wages
• D. Expense

Answer: (D)

Expense is the money a business spends to operate and to earn revenue. When you buy goods to sell or pay for services that help the business run, those costs are recorded as expenses. The cost of goods sold is a specific expense that covers the direct costs of the goods that were sold during a period. Other common expenses include rent, utilities, and wages. The reason this term fits best is that it describes money spent, not money owed (debt) or borrowing terms (credit), and while wages are a type of expense, the broader word expense covers all such costs.