Which of the following best describes an expense?

An expense is best described as an outflow that decreases owner's equity. In accounting, expenses represent the costs incurred in the process of generating revenue. When a business incurs an expense, it typically results in a cash outflow or a reduction in other assets.

This outflow reflects the consumption of resources in producing goods or services, which is fundamental to the operations of any business. As these expenses accumulate, they reduce the net income, consequently leading to a decrease in owner's equity within the balance sheet. This connection between expenses and equity is critical, as it reflects the impact of business operations on the financial position of the entity.

While an expense does lead to a reduction in overall profitability (which aligns with one of the other options), the most precise definition is the direct relationship between expenses and the outflow of resources that ultimately affects the owner’s equity. An increase in cash flow or an inflow of economic benefits would not accurately represent an expense, as expenses typically reflect costs rather than revenue or cash inflows.