Operating activity
Operating activity is the activity most closely related to conducting the business for which the enterprise was established. Activities such as selling merchandise and services to customers and paying salaries and other expenses needed to continue earning the operating revenue are classified as operating activities.
Definitions
According to College Accounting: A Practical Approach by Slater (13th edition),
- Operating activities. Those activities most closely related to conducting the business for which the enterprise was established. Activities such as selling merchandise and services to customers and paying salaries and other expenses needed to continue earning the operating revenue are classified as operating activities.
According to Managerial Accounting by Braun, Tietz (5th edition),
- Operating activities. The day-to-day profit-making activities of the company, such as making or buying inventory, selling inventory, selling services, paying employees, advertising, and so forth; this also includes any other activity that affects net income (not just operating income), current assets, or current liabilities.
Related concepts
- Accounting (alternatively known as accountancy) is management of financial data, information, and knowledge about financial transactions of legal entities. Accountancy tends to include bookkeeping and, depending on a particilar enterprise, may also include quatitative analysis of financial data in the bookkeeping system and/or business intelligence.
