Use the following codes to indicate how the cash flow effect, if any, of each transaction would be reported on a statement of cash flows if the operating activities section is prepared using the direct method.
-Declared cash dividends.
A)Inflow from operating activity
B)Outflow from operating activity
C)Inflow from investing activity
D)Outflow from investing activity
E)Inflow from financing activity
F)Outflow from financing activity
G)Noncash investing and financing activity
H)Not reported on statement of cash flows

Question

Quizplus · Accepted Answer

Declaring cash dividends does not involve an immediate cash flow; it is a non-cash transaction until the dividends are actually paid.

Use the Following Codes to Indicate How the Cash Flow