What term refers to the costs associated with running a business?

The term that refers to the costs associated with running a business is "expenses." Expenses encompass all the costs incurred during the normal functioning of a business, including payments for goods and services necessary for operations, salaries, rent, utilities, and other overhead costs. Tracking expenses is crucial for business management because they directly impact profitability.

Understanding expenses is vital for businesses as managing these costs effectively can lead to increased profitability and sustainability. In contrast, revenue pertains to the money generated from sales, liabilities refer to the debts and obligations owed by the business, and assets are the resources owned by the business that have economic value. Each of these terms plays a distinct role in business finance but does not specifically denote the costs incurred in running the business.