The activities and updates that will be recorded as Last Activity time:

• Editing fields in a record
• Adding & updating activities, i.e. Tasks, Events, Calls
• Sending emails to leads and contacts
• Adding & editing notes
• Adding potentials & contacts under an account
• Changing the owner of the record
• Adding and deleting a record
  (This does not include deleting a record associated to the parent record.)
• Closing a task
  (Not used for events as they are automatically moved under Closed Activities after the End DateTime.)
• Deleting and restoring the records (individually or in bulk).

The activities and updates that will NOT be recorded as Last Activity time:

• Mass operations such as Mass Update, Mass Transfer etc.
  (Except for the Mass Delete option.)
• Editing contacts or potentials under an account will not be listed under the Account.
• Deleting related lists under a record.