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 activity generating operating cash flows as they are related to financing activities. Operating cash flows include cash inflows from sales and services, as well as outflows related to operating expenses such as payments to suppliers and income taxes.

Using the Direct Method of Preparing the Statement of Cash