When preparing a statement of cash flows, retained earnings adjustments are required so that which of the following are separated on the statement?

Question

Quizplus · Accepted Answer

Retained earnings adjustments are necessary to separate net income and dividends on the statement of cash flows. The statement of cash flows reports cash inflows and outflows from operating, investing, and financing activities, and it is necessary to adjust retained earnings to ensure that cash flows from dividends are not included in operating activities.

When Preparing a Statement of Cash Flows, Retained Earnings Adjustments