Which of the following statements about the statement of cash flows is correct?
A)A company with a net loss on the income statement will always have a net cash outflow from operating activities.
B)A purchase of equipment is classified as a cash inflow from investing activities.
C)Cash dividends received on stock investments are classified as cash flows from operating activities.
D)Cash dividends paid are classified as cash flows from operating activities.

Question

Quizplus · Accepted Answer

Cash dividends received on stock investments are classified as cash flows from operating activities according to most accounting standards, including the International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP). This classification reflects the cash inflows that result from the company's primary revenue-generating activities, even though the dividends are derived from investments.

Which of the Following Statements About the Statement of Cash