What type of business activity would purchasing a building fall under?

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Study for the Texas Aandamp;M University (TAMU) ACCT229 Exam. Get exam-ready with flashcards, detailed explanations, and multiple choice questions. Enhance your understanding and boost your confidence!

Purchasing a building is classified as an investing activity because it pertains to the acquisition of long-term assets that will be used for the production of goods or services. Investing activities generally involve transactions related to the purchase or sale of physical assets, such as property, plant, and equipment, or investments in other companies.

When a business buys a building, it is making a commitment of resources to acquire an asset that will provide future economic benefits, which is a core characteristic of investing activities. The funds spent on the building are expected to generate returns over time, whether through the business operations conducted in that building or potential resale value.