Final answer:
In the context of business and accounting, the cost of assets consumed or services used is referred to as an expense. It is an important element in determining the profit of a company after offsetting expenses against generated revenues.
Step-by-step explanation:
The cost of assets consumed or services used in the course of generating revenue is known as an expense. When individuals pay for goods or services from the firms, that cost is considered to be an expense because they are consuming those goods or services. An expense is the cost of operations that a company incurs to generate revenue. It is simply defined as the cost one is required to spend on obtaining something. As the popular saying goes, “it costs money to make money.” In accounting, expenses are offset against revenues to determine a company's profit.