How would you classify business activities

By Louann Cassano Whether it’s drinks with a client or dinner during a work trip, meals and entertainment are generally tax-deductible business expenses. However, the size of the allowable write-off depends on the circumstances of the expenditure, including the purpose of the meal or entertainment, who the recipient is and where the expense takes place. If you don’t understand the IRS rules that govern these deductions, you may be tempted to lump all meals and entertainment into one category. However, doing so can prove costly come tax time, either by denying your business its rightful maximum deduction or by catching the attention of the IRS. Here are some tips for ensuring that meals and entertainment are properly classified to keep your business in compliance and ensure it receives the full tax break it is entitled to. Understand the rules For tax purposes, meals and entertainment fall into two basic categories — those that are 50 percent deductible, and those that are eligible for a 100 percent deduction. In general, meals and entertainment that double as compensation or fringe benefits for a large group of employees qualify for the 100 percent deduction. Examples include company holiday parties, employee-focused social activities and food and drink provided for workers as a benefit or as an incentive to work extra hours. Public events intended as goodwill or advertising, and transportation to and from business meals or entertainment activities, are also 100 percent de...

Business activities refers to all those economic activities, whether directly or indirectly involved in the creation of goods and services for satisfying the consumer needs and ensuring profit earning through customer satisfaction. Business activities are often divided into operating activities, investing activities, and financing activities. Among all the business activities, operating activities tend to play a significant role because these activities directly influence the company performance. Based on function, business activities are classified into broad categories namely Industry and Commerce. Industry is engrossed with the production, processing or manufacturing of goods. These types of business units are known as “ industrial enterprises”. The Industrial enterprises produce consumer goods as well as machinery and equipment. On the other hand, commerce activities include all the activities, which are necessary for storage and distribution of goods and services. Such units are termed as “commerce enterprises”. The commerce enterprise provides trading and service activities like banking, insurance, transport, and warehousing. Read the article below to know types and categories of business activities in brief. (Image Will be Updated Soon) What is Business? Business is described as an organization or entity engaged with industrial, commercial, or professional activities. Businesses can be for-profit items/services, or they can be non-profit groups that function to fulf...

Business activities can be classified in the following ways: I. Industry: Different types of industries are as follows: 1. Primary Industry: The primary industry includes those activities through which the natural resources are used to provide raw materials to other industries. Primary industries are of two types. 2. Secondary Industry: Under this industry new products are manufactured by using the previously produced things e.g., producing cotton is a primary industry and manufacturing cloth out of cotton is a secondary industry. It is of two types. 3. Tertiary or Service Industry: It includes those services which help business to move smoothly e.g. transport, bank, insurance, storage and advertising. II. Commerce: Commerce refers to all those activities which are concerned with the transfer of goods and services from the producers to the consumers. It embraces all those activities which are necessary for maintaining a free flow of goods and services. It includes trade and auxiliary to. trade. Trade refers to buying and selling of goods and services with the objective of earning profit. It is classified into two categories. 1. Internal Trade: It takes place within a country. Internal trade is classified into two categories—retail trade and wholesale trade. 2. Retail Trade: It refers to buying of goods and services in relatively small quantities and selling them to the ultimate consumers. (а) External Trade: It happens between two or more countries. External trade can be c...

Various business activities may be classified into two broad categories — industry and commerce. • The industry refers to economic activities, which are connected with the conversion of resources into useful goods. Industry is used for activities in which mechanical appliances and technical skills are involved. These include activities relating to producing or processing of goods, as well as, breeding of animals. • Commerce includes two types of activities, viz., (i) trade and (ii) auxiliaries to trade. Buying and selling of goods are termed as trade. Auxiliaries to trade and include transport, banking, insurance, communication, advertisement, packaging and warehousing. Commerce provides the necessary link between producers and consumers. It embraces all those activities, which are necessary for maintaining a free flow of goods and services.