Final answer:
Non-cash balance sheet accounts that affect net income fall under operating activities, which reflect the cash generated or used in a company's core business operations.
Step-by-step explanation:
Changes in non-cash balance sheet accounts that directly affect net income are classified as operating activities. Operating activities include transactions and events that enter into the determination of net income. Examples of these activities are changes in inventories, accounts receivables, and accounts payables. They are part of the company's core business operations and are reflected in the statement of cash flows because they impact the cash the company generates from its day-to-day activities.