Using the direct method of preparing the statement of cash flows, which of the following is not an activity generating operating cash flows?
A)Collections from customers
B)Payments to suppliers
C)Payments for income taxes
D)Payments of dividends

Question

Quizplus · Accepted Answer

Payments of dividends are not considered an operating activity because they are a distribution of profits to the owners of the company and do not directly relate to the company's operations. The other choices listed are all operating activities that generate operating cash flows.

Using the Direct Method of Preparing the Statement of Cash