Activities that involve the production or purchase of merchandise and the sale of goods and services to customers, including expenditures related to administering the business, are classified as:
A) Financing activities.
B) Investing activities.
C) Operating activities.
D) Direct activities.
E) Indirect activities.

Question

Quizplus · Accepted Answer

Operating activities involve the day-to-day operations of a business, including the production and sale of goods and services, as well as the administrative expenses necessary to support the operations. Financing activities involve raising funds to finance the business, such as through issuing stock or taking out loans, while investing activities involve buying or selling long-term assets, such as property, plant, and equipment. Direct and indirect activities are not recognized accounting classifications for business activities.

Activities That Involve the Production or Purchase of Merchandise and the Sale