What term is used to describe the costs incurred by a business?

The term that best describes the costs incurred by a business is "expenses." Expenses represent the financial outflows that a business must cover in order to operate, which can include items such as salaries, rent, utilities, and raw materials. These costs are essential for day-to-day operations and for generating revenue.

Identifying expenses accurately is crucial for financial management, as they directly impact a business's profitability. When expenses exceed revenues, it can lead to financial difficulties, making it important for businesses to monitor, control, and optimize their costs effectively.