Using the Direct Method
For the following question(s), indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the direct method.
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When using the direct method, where is the payment of a cash dividend shown on the statement of cash flows?
A) Operating activity
B) Investing activity
C) Financing activity
D) Noncash investing and financing activity

Question

Using the Direct Method 
For the following question(s), indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the direct method.
-
When using the direct method, where is the payment of a cash dividend shown on the statement of cash flows?
A) Operating activity
B) Investing activity
C) Financing activity
D) Noncash investing and financing activity

Quizplus · Accepted Answer

The payment of a cash dividend is classified as a financing activity on the statement of cash flows, as it involves the distribution of cash to shareholders.