On an indirect method statement of cash flows, dividends paid during the year are:
A)added to net income.
B)reflected in the investing activities section.
C)reflected in the financing activities section.
D)deducted from net income.

Question

Quizplus · Accepted Answer

Dividends paid during the year are a financing activity as they involve distributing profits to shareholders. As a result, they are reflected in the financing activities section of the indirect method statement of cash flows.

On an Indirect Method Statement of Cash Flows, Dividends Paid