Which of the following would be considered an example of an expenditure?

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Prepare for the WISE Economics and Personal Finance Test. Use flashcards and engage with multiple choice questions, complete with hints and explanations. Be exam-ready with comprehensive study tools!

An example of an expenditure is a payment made for groceries because it represents a direct outflow of money to purchase goods and services. Expenditures are transactions where money is spent, which typically relate to daily needs like food, housing, utilities, and other purchases necessary for living. When you pay for groceries, you're making an expenditure that reflects consumption.

In contrast, income received from a job is revenue and increases your financial resources rather than being an expenditure. Money saved in a savings account signifies funds that are retained and not spent. Dividends received from stocks are also forms of income that add to your financial resources, not expenditures. Therefore, the payment made for groceries is the only choice that fits the definition of an expenditure.

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