What type of business activity earns revenue and generates expenses?

Operating activities are the primary source of revenue for a business and represent the day-to-day functions of the company. This includes activities such as selling products or services and involves incurring expenses related to production, selling, and administrative functions. Essentially, any revenue-generating activity that a business undertakes falls under operating activities, as they relate directly to the core operations of the business.

Investing activities involve buying and selling physical assets or investments, financing activities primarily relate to raising capital or borrowing money, and managing is more of an overarching function rather than a specific category of business activity. Therefore, only operating activities encompass both the generation of revenue and the incurrence of expenses related to the main operations of a business.