Paying property taxes is which type of business activity?

Question

BlackTom AI · Accepted Answer

The question asks: Paying property taxes is which type of business activity?
Option 1: Financing. This category involves obtaining funds for the business, such as loans, equity, or debt financing; paying property taxes is not about obtaining or repaying capital, so this is not correct.
Option 2: Investing. Investing activities relate to the acquisition or sale of long-term assets like equipment, buildings, or investments; property taxes are recurring expenses, not investments, so this is not correct.
Option 3: Operating. Operating activities include the normal, ongoing business activities that generate revenue and incur expenses, such as paying taxes, wages, utilities, and inventory costs; paying property taxes fits squarely here as a routine expense of running the business. This is the correct interpretation.
Option 4: Not a business activity. Since paying property taxes is a routine obligation tied to operating a property as part of the business, it is indeed a business activity; labeling it as not a business activity is incorrect.
In summary, property tax payments are part of the day-to-day operating costs of a business, making 'Operating' the appropriate category rather than Financing, Investing, or Not a business activity.

Paying property taxes is which type of business activity?

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