This differs from money it earns from investing or the sale of an asset. Operating activities generates the majority of the cash flows for the company as it is directly linked to the core business activities of the company like sales, distribution, production and so on, these activities also determine the profitability of the company and items categorized under this head are the primary revenue units of the company. Along with sales and marketing expenses, these costs make up the overhead expense of a business. These expenses might include research costs, real estate and equipment purchases, fees, licenses, permits, deposits and insurance premium payments. These expenditures are the same as selling, general and administrative expenses. Operating activities is a classification of cash flows within the statement of cash flows. Some advantages are mentioned here for having a basic understanding. Operating expenses are those expenditures that a business incurs to engage in activities not directly associated with the production of goods or services. There are many advantages to operating systems. Business operations refer to activities that businesses engage in on a daily basis to increase the value of the enterprise and earn a profit. Some common examples of operating systems are as follows; Windows XP, Windows 7, Windows 8, Windows 10, Android, IOS, MacOS, Disk operating systems (DOS). These differ from overhead costs, which occur from non-production activities such as office administration, marketing, human resources and information technology. In other words, these are the primary business operations that a company performs to earn revenue. Accounting BestsellersAccountants' GuidebookAccounting Controls Guidebook Accounting for Casinos & Gaming Accounting for InventoryAccounting for ManagersAccounting Information Systems Accounting Procedures Guidebook Agricultural Accounting Bookkeeping GuidebookBudgetingCFO GuidebookClosing the Books Construction AccountingCost Accounting FundamentalsCost Accounting TextbookCredit & Collection GuidebookFixed Asset AccountingFraud ExaminationGAAP GuidebookGovernmental Accounting Health Care Accounting Hospitality Accounting IFRS GuidebookLean Accounting Guidebook New Controller GuidebookNonprofit Accounting Oil & Gas Accounting Payables ManagementPayroll ManagementPublic Company Accounting Real Estate Accounting, Finance BestsellersBusiness Ratios GuidebookCorporate Cash ManagementCorporate FinanceCost ManagementEnterprise Risk ManagementFinancial AnalysisInterpretation of FinancialsInvestor Relations GuidebookMBA GuidebookMergers & AcquisitionsTreasurer's Guidebook, Operations BestsellersConstraint ManagementHuman Resources GuidebookInventory Management New Manager Guidebook Project ManagementPurchasing Guidebook. The operational activities related to running a business that aren’t directly linked to production, sales and marketing fall under a catchall classification called General and Administrative. Privacy Notice/Your California Privacy Rights. Examples of cash inflows from operating activities are: Cash receipts from the sale of goods and services, Cash receipts from the collection of receivables, Cash receipts from the settlement of insurance claims. Money earned from a business’s core activities constitutes its operating revenues. The Three Main Business Activities Measured by Financial Statements, Examples of Expenses for a Restaurant Business, Reasons for a Decline in Operating Profit, Ready Ratios: Cash Flows from Operating Activities, Corporation Vs. These include functions such as accounting, human resources, purchasing, continuous improvement, facility maintenance and information technology. Operating Activities Definition. Operating activities are the regular business practices, procedures and pursuits that keep a company running on a long-term basis. Examples of operating expenses include the following: Examples of Compensation-Related Operating Expenses For example, when a company spends $100,000 per month and brings in $100,000 in revenue, it reaches an operating break-even point, even if the business still owes investors or lenders $200,000 in start-up capital. Operating activities generates the majority of the cash flows for the company as it is directly linked to the core business activities of the company like sales, distribution, production and so on, these activities also determine the profitability of the company and items categorized under this head are the primary revenue units of the company.