The Cost Of Assets Consumed Or Services Used Is Also Known As

The correct answer is (a). An Expense, as the use or consume of assets or services gives benefits to the business in conducting the daily operations of the business in order to earn Revenue for the business. Such as Rent Expense is incurred to receive the rent facility services from company / corporation and to use the assets in the business and in order to earn revenue from business operations.

In accounting, the revenues must be matched with relevant expenses of the accounting period, otherwise, it does not give the correct accounting information of current accounting period to users of accounting information. For example, if a company paid (12 months of total $6,000,000 and per month $500,000) in advance to property owner on 1st June, 2022, then the rent for six months is $3,000,000 from 1st June, 2024 to 31st December, 2022, is charged to expense in Income Statement for the accounting period ending on 31st December, 2022 and the remaining unexpired portion is transferred to balance sheet as a current asset and recorded on asset side. So, the assets used it is expired known as expense and unexpired cost is treated as an asset.

Other options of this multiple choice question are wrong and not relevant to the given statement.