CIPS L4M2 Practice Test 2025 – Comprehensive Exam Study Resource

Question: 1 / 400

What does expenditure refer to?

Money received from sales

An amount of money spent

Expenditure refers to an amount of money that is spent on various business activities or operations. This encompasses all financial outflows from an organization, including expenses for purchasing goods, services, salaries, operational costs, and investments necessary for the company's functioning and growth. Understanding expenditure is crucial for financial management as it directly impacts profitability and budgeting.

The other options do not accurately define expenditure: money received from sales pertains to income rather than spending; total assets represent the cumulative value of what a business owns rather than how much is spent; and the balance in bank accounts reflects available funds, rather than an indication of expenditures made. Therefore, defining expenditure as an amount of money spent captures its essence in the context of financial management and business operations.

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The total assets of a business

The balance in bank accounts

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