Final answer:
An organizational unit that incurs expenses but does not generate revenue is known as a cost center, which is crucial for managing expenses and efficiency within a company.
Step-by-step explanation:
An organizational unit that incurs expenses, but does not generate revenue, is called a cost center. Cost centers are typical within companies to help keep track of and manage expenses. Examples of cost centers include the human resources department, accounting department, or IT support. These departments do not directly contribute to sales or revenue generation, but they incur costs that are necessary for the business to operate efficiently. Cost centers are crucial for budgeting and accounting purposes as they help in analyzing where a company may be able to reduce costs or increase efficiency.