Which of the following is an example of an expense?

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Study for the Texas Aandamp;M University (TAMU) ACCT229 Exam. Get exam-ready with flashcards, detailed explanations, and multiple choice questions. Enhance your understanding and boost your confidence!

An expense represents a cost incurred in the process of earning revenue. It is essential to recognize that expenses reduce the net income of a business, reflecting the resources consumed during operations. Wages are indeed an example of an expense because they represent the payments made to employees for their labor, which is necessary for the company to operate and generate revenue.

In the context of the options given, accounts payable refers to liabilities that a company owes to suppliers, but it is not an expense itself; rather, it reflects an obligation to pay for goods or services. Common stock represents the equity raised from shareholders and does not reflect an expense, as it is part of the capital structure of a company. Retained earnings represent the accumulated profits that have been retained in the business rather than distributed as dividends, thus it also does not qualify as an expense. Therefore, wages unequivocally align with the definition of an expense, showcasing the cost associated with employing staff.