Which term best matches the definition: The outflow or other use of assets by an entity in order to sell goods and services; expenses are subtracted from revenues to determine net income.

• A. Revenue
• B. Assets
• C. Expenses
• D. Net Income

Answer: (C)

Outlays to operate the business and use up resources in order to earn sales fall under expenses. They capture the costs incurred to produce goods or provide services, such as rent, salaries, utilities, and materials. These expenses are subtracted from revenues to determine net income, which shows how profitable the business is. Revenue is the inflow from selling goods or services, assets are resources the company owns, and net income is the result after deducting expenses from revenues.