Which of the following statements about the payment of dividends is true?
A)They are reported in the cash from operations.
B)They are reported in the cash from financing activities.
C)They are reported in the cash from investing activities.
D)They are reported as an expense on the income statement.

Question

Quizplus · Accepted Answer

Dividends are payments made to shareholders, and fall under the category of financing activities on the statement of cash flows. They are not reported as an expense on the income statement, as they do not represent a cost of doing business, but rather a distribution of profits to the owners of the company.

Which of the Following Statements About the Payment of Dividends