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and approval of professional accountants to Types of business activities
include, maintaining and publishing register reflected in accounting
of authorized and approved professional information
accountants in the country. Categorically, there are three major types of
business activities reflected in accounting
Accounting information and information. They include, operating
FOR ONLINE READING ONLY
its users activities, financing activities and investing
For stakeholders including managers, activities.
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creditors, investors, regulators, and Operating activities: are the main activities
customers, accounting information is that a business does to bring its products and
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essential. It assists regulators in guaranteeing services to the market on an ongoing basis.
compliance, investors and creditors in They depend on the nature of the
analysing financial health, customers in business. For example, for manufacturing
assessing stability, and management in company these include manufacturing,
planning and controlling. In general, it selling and marketing of the products. Non-
encourages accountability, openness, and operating activities are not as frequent; they
trust in the business world. include one-time events that may affect
revenues, expenses or cash flow but fall
Nature of accounting information outside the company’s routine and core
Accounting information as presented in business activities, for example gain or loss
different types of financial report provides from sale of investment/assets.
the means through which different users
of accounting information can understand Financing activities: affect the long-term
liabilities and equity/capital of the owners
the different activities taking place within as a result of the flow of cash (inward and
the business. It does so in a unique way by outward between a business and its owners
reflecting the monetary values of different on the one hand, and with creditors on the

activities undertaken by the business. When contrary). Examples on these include,
recording in books of account, business selling of shares, adding loans, payment
activities are commonly referred to of dividends and interests etc.
as business transactions that is business Investment activities: are about using your
events that have monetary impact on an money to buy things like stocks, bonds,
entity’s financial statements and recorded or real estate, hoping they will increase in
as entries in financial records. Examples of value over time and bring you more money.

business activities or transactions include, It is like making smart choices now to grow
paying a supplier for services rendered or your wealth in the future. These include,
goods delivered, buying office equipment purchases of long-term assets such as
by cash, and selling goods on credit. property, plant, and equipment. They also

Student’s Book Form Five
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