Thursday, August 2, 2012

Operating Activities

The Operating Activities are those business transactions which generates revenue for the organization. These include expenses incurred to produce revenues.

The following are the transactions included under the operating activities:

A. Transactions which increases cash (cash receipts from operating activities)

  1. Selling or sale of goods
  2. Rendering or sale of services
  3. Selling of trade securities
  4. Earnings from interest income
  5. Earnings from dividend income

B. Transactions which decreases cash (cash payments or disbursements for activities)

  1. Purchases of inventory
  2. Operating expenses
  3. Taxes
  4. Interest expense (short-term)
  5. Purchase of trading securities



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