If a company paid dividends during the year, how would it be classified on the cash flow statement?

Name: If a company paid dividends during the year, how would it be classified on the cash flow statement?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Dividends are a cash outflow to the company and therefore classified as a cash flow from financing activities on the cash flow statement. This is because they are paid to the company's shareholders, which represents a return of capital to them.

If a Company Paid Dividends During the Year, How Would