Yes, you are correct.
Not only the transaction costs, but also profits and/or losses, when converted from pips to dollars.
Example: You trade one micro-lot of EUR/USD in a USD-denominated account. Pips are worth $0.10 each in this trade. So, if you earn a 100 pip profit, your profit (in dollars) is 100 x $0.10 = $10.
If you took a loss instead, then the loss would likewise be the number of pips of loss x $0.10.
And, if the spread is 5 pips, as in your example, then at the moment when you entered your trade, you would start off with a "loss" of 5 pips x $0.10 = $0.50
Regarding terminology: There is no such thing as a "regular" lot.
A lot is 100,000 units of the base currency in the pair you are trading (100,000 EUR, if you're trading EUR/USD).
Ever since fractional lots were introduced into retail forex trading many years ago, it has been common to refer to a lot as a standard lot, to distinguish it from any of the fractional lots.
Fractional lots are mini-lots (10,000 units), micro-lots (1,000 units) and nano-lots (100 units).
If the quote currency in the pair you are trading matches your account currency (example: trading EUR/USD in a USD account), then pip-values are as follows:
trading a standard lot, 1 pip is worth 10 units of the account currency
trading a mini-lot, 1 pip is worth 1 unit of the account currency
trading a micro-lot, 1 pip is worth 1/10 of a unit of the account currency
trading a nano-lot, 1 pip is worth 1/100 of a unit of the account currency
In the case of a EUR/USD trade in a USD-denominated account, pip-values would be:
$10 per pip, if you are trading a standard lot
$1 per pip, if you are trading a mini-lot
$0.10 per pip, if you are trading a micro-lot
$0.01 per pip, if you are trading a nano-lot
In an account where you can trade individual units of currency (Oanda, for example), the pip-value for a 1-unit trade in EUR/USD, assuming your account currency is USD, would be 1/100 of 1 cent per pip.