Which of the following is not correct about the statement of cash flows?
A)Paying dividends to investors creates a cash outflow from financing activities.
B)A purchase of equipment is classified as a cash outflow from investing activities.
C)Cash dividends paid are classified as cash flows from operating activities.

Question

Quizplus · Accepted Answer

Cash dividends paid are classified as cash flows from financing activities, not operating activities. Operating activities are cash flows related to the day-to-day operations of a business, such as revenue and expenses. Financing activities are cash flows related to obtaining or repaying financing, such as issuing stock or paying dividends.

Which of the Following Is Not Correct About the Statement