Which of the following describes examples of operating activities?

Operating activities are the primary revenue-generating activities of a business, which include the day-to-day operations that comprise the core functions of the entity. This encompasses selling goods or services, purchasing inventory necessary for sales, and also includes the costs associated with the workforce, such as paying employees.

In the context of the options presented, the activities of selling or buying inventory and paying employees are quintessential examples of operating activities. These actions directly impact the company’s ability to generate revenue and manage expenses, both of which are key measures of a company’s operational efficiency and profitability.

Other choices involve activities not classified as operating. For instance, buying long-term assets relates to investing activities rather than day-to-day operations. Similarly, borrowing money and selling stock fall under financing activities, as they pertain to transactions that alter the capital structure of the company rather than its operations. Advertising, while it can be seen as an operating expense, doesn't fully encompass the range of activities related to core operations like buying inventory and paying employees do. Thus, the choice that correctly identifies operating activities aligns well with the essential functions of a business.