A business, also known as an enterprise or a firm, is an organization involved in the trade of goods, services, or both to consumers.
A business process or business method is a collection of related, structured activities or tasks that produce a specific service or product (serve a particular goal) for a particular customer or customers
Types of business structures
Sole Proprietorship
A Sole Proprietorship is one individual or married couple in business alone. Sole proprietorships are the most common form of business structure. This type of business is simple to form and operate, and may enjoy greater flexibility of management, fewer legal controls, and fewer taxes.
General Partnership
A General Partnership is composed of 2 or more persons who agree to contribute money, labor, or skill to a business. Each partner shares the profits, losses, and management of the business, and each partner is personally and equally liable for debts of the partnership.
Corporation
A Corporation is a more complex business structure. A corporation has certain rights, privileges, and liabilities beyond those of an individual. Doing business as a corporation may yield tax or financial benefits, but these can be offset by other considerations, such as increased licensing fees or decreased personal control.
The Three Types of Business Activities
Financing Activities
Financing activities are transactions that are involved with financing the company and/or individual customer financing. Any transaction like a loan or anything bought on credit would be this type. Any monies paid on principle or interest paid would be considered a financing activity and would go in that section of the Statement of Cash Flows. Dividends paid to shareholders or the repurchase of stock would also be considered a financing activity.
Investing Activities
Investing transactions are those that are not part of daily operation of the company and are used solely for investing purposes. Small term investments would be considered obviously, but any loans made to customers or other entities would also be considered an investing transaction. Dividends and interest earned on investments would also qualify under the investing category for Statement of Cash Flows. Purchases of long term investments such as land, equipment or property will also be viewed as an investment.
Operating Activities
Operating activities are all the different activities a company will do in their day-to-day business practices involved with running the company. This would be anything from paying bills and employees, to keeping the heat on by paying that bill. Product cost and delivery cost are also operating activities, expenditures made to keep the company running. Sales and income from operations are also put in the operating section of all separating paperwork.