An example of an operating activity on the statement of cash flows is cash dividends received on investments.Assume the direct method is used.

Question

Quizplus · Accepted Answer

Cash dividends received on investments would be included in the operating activities section of the statement of cash flows when the direct method is used. The direct method reports cash inflows and outflows from operating activities separately, including cash received from customers, cash paid to suppliers and employees, and other operating activities such as interest and dividends received.

An Example of an Operating Activity on the Statement of Cash