Business Activities and Transactions
What happens within an enterprise in the normal course of business consists of activities and transactions. The distinction is important. Activities are broader groupings of transactions, which fall within any of the three types of activities. The transactions that comprise each activity affect the impact of that activity on the enterprise’s financial position and performance. Identifying what major transactions affect an activity helps in enterprise planning and control. Information about the activities of the enterprise is available in general purpose financial reports.
At the end of this lesson, you shall be able to:
- Know the different business activities
- Know the purpose and characteristics of each business activity
- Understand the distinction between activities and transactions
- Understand the effect of business activities on the enterprise’ financial position and performance
- Know the nature and frequency common business transactions
