A company doing business of manufacturing garments and doing activities like procurement of raw material, the incurrence of manufacturing expenses, sale of garments. These are classified as ......... activity.

Operating activity

The correct answer is option 1- Operating activity.

Operating activities are the activities that constitute the primary or main activities of an enterprise. For example, for a company manufacturing garments, operating activities are procurement of raw material, incurrence of manufacturing expenses, sale of garments, etc. These are the principal revenue generating activities (or the main activities) of the enterprise and these activities are not investing or financing activities.