Question

Now that you know that meaning of operating activities, state clearly what would constitute the operating activities for the following types of enterprises

(i) Hotel

(ii) Film production house

(iii) Financial enterprise

(iv) Media enterprise

(v) Steel manufacturing unit

(vi) Software development business unit.

Answer 1

(i) Hotels

1. Receipts obtained from sale of goods to customers.

2. Customer stay, payments of wages and salaries, food items and electricity are operating activities

(ii) Film Production House:

1. Receipts obtained from selling of film rights to distributors

2. Payment provided to actor, actresses, directors and other employees.

(iii) Financial Enterprises:

1. Receipts obtained from loan repayments, interest received from investments

2. Salary for employees, expenditure incurred for recovering loans, loan repayment etc

(iv) Media Enterprises:

1. Receipts that are obtained from various advertisements

2. Payments made to photographers, employees and reporters

(v) Steel Manufacturing Unit:

1. Receipts obtained from sale of steel rods, castings and sheets.

2. Payments made for purchasing iron, coal and salaries to staff.

(vi) Software Development Business Unit:

1. Receipts obtained for software sales and license renewal

2. Payments towards salaries of employees