When New Fashion Stores, Inc. paid a dividend to its shareholders, it recorded to outflowing cash in the ________ activities section of its statement of cash flows.

Question

Quizplus · Accepted Answer

Dividends are payments made by a company to its shareholders and are considered a financing activity because they represent a distribution of profits to the owners of the company. Therefore, the outflow of cash from paying a dividend would be recorded in the financing activities section of the statement of cash flows.