Ordering office supplies can be described as which of the following types of activities?

• A. A financing activity
• B. An administrative activity
• C. A revenue-generating activity
• D. A cost of goods sold activity

Answer: (B)

Verified step by step guidance

1. Understand the nature of the activity: Ordering office supplies is a routine task that supports the general operations of a business rather than directly generating revenue or being tied to financing or production.
2. Eliminate options that do not fit: A financing activity involves raising capital (e.g., issuing stock or borrowing funds), which is unrelated to ordering office supplies. Similarly, a revenue-generating activity involves activities that directly produce income, which ordering supplies does not do.
3. Consider the administrative aspect: Administrative activities are those that support the overall functioning of the business, such as managing resources, maintaining records, or ensuring smooth operations. Ordering office supplies falls under this category.
4. Exclude cost of goods sold activity: Cost of goods sold (COGS) refers to the direct costs associated with producing goods sold by a company, such as raw materials and labor. Office supplies are not part of production costs.
5. Conclude that ordering office supplies is an administrative activity, as it supports the business's operations without directly contributing to revenue generation or production.