What term describes cash that an enterprise spends to produce its goods or services?

• A. Revenue
• B. Cost
• C. Profit
• D. Sales

Answer: (B)

The term that describes cash that an enterprise spends to produce its goods or services is "Cost." This concept encompasses all the expenses incurred in the production process, which includes raw materials, labor, manufacturing overhead, and other costs directly associated with creating a product or service. Understanding costs is crucial for businesses as it directly affects pricing strategies, profitability, and financial planning.

Other options relate to different financial aspects of a business. Revenue refers to the income generated from selling goods or services, which is the opposite of costs and indicates how much money is flowing into the business. Profit is the financial gain obtained after all costs have been deducted from revenue, signifying what the business keeps after expenses. Sales usually refer to the total amount or volume of goods sold, again, highlighting a different aspect of financial transactions. Therefore, in the context of expenditure related to production, "Cost" is the appropriate term.