What major group of accounts is comprised of costs incurred in the operation of a business?

The correct answer is grounded in the fundamental principles of accounting and finance. Expenses represent the costs incurred by a business in order to generate revenue. These costs can include various operational expenditures, such as salaries, rent, utilities, and materials needed for production. When a business spends money to maintain its day-to-day operations and support its revenue-generating activities, these outflows are categorized as expenses.

Categorizing costs as expenses is crucial for financial reporting, as these figures directly impact a company’s profitability. The accounting framework recognizes expenses as a deduction from revenue to determine the net income, making them a vital component in assessing overall financial performance.

In contrast, assets represent resources owned by the business that provide future economic benefits, revenue pertains to the income generated from sales or services, and liabilities are obligations the business owes to external parties. Understanding these distinctions is essential for interpreting financial statements and grasping how different components of a company's finances interact.