When using the direct method, how 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

Quizplus · Accepted Answer

Payment of cash dividends is shown as a financing activity on the statement of cash flows because it represents a distribution of the company’s profits to shareholders, which is a use of cash from the company’s financing sources.

When Using the Direct Method, How Is the Payment of a Cash