In a statement of cash flows, the payment of a cash dividend on common stock outstanding should be classified as cash outflows for
A)operating activities
B)investing activities
C)lending activities
D)financing activities

Question

Quizplus · Accepted Answer

Payment of cash dividends is an activity related to financing because it involves distribution of profits to the stockholders. Therefore, it should be classified as a cash outflow for financing activities in the statement of cash flows.

In a Statement of Cash Flows, the Payment of a Cash