what kind of activity is payment of dividends in the statement of cash flows?
Question
what kind of activity is payment of dividends in the statement of cash flows?
Solution
The payment of dividends in the statement of cash flows is classified as a financing activity. This is because it involves the movement of cash between the company and its investors or owners. Financing activities generally include transactions with owners and the borrowing or repayment of money. Therefore, when a company pays dividends, it is using its cash to finance the business, hence it is considered a financing activity.
Similar Questions
How is the payment of dividends to shareholders classified on the statement of cash flows?Group of answer choices
Dividends paid belong in the operating activities section of the statement of cash flows.Group startsTrue or FalseTrue, unselectedFalse, unselected
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