The amount of money that a firm spends on goods and services is referred to as _______.

Question

Quizplus · Accepted Answer

The term commonly used to describe the amount of money a firm spends on goods and services is "purchase spend." COGS (Choice A) specifically refers to the cost of goods sold, which is only a subset of purchase spend. Supply spending (Choice C) is a less common term and can be confusing, as it may refer to either the amount a firm spends on supplies or the amount it spends on purchasing goods and services from suppliers. Cost of supplies (Choice D) again only covers a subset of purchase spend, and is specifically referring to the cost of the physical supplies used by the firm. Therefore, the best choice is B.

The Amount of Money That a Firm Spends on Goods