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

Question

Quizplus · Accepted Answer

Retained earnings adjustments are required to separate net profits and dividends on the statement of cash flows. This is because net profits include non-cash expenses such as depreciation, which are added back to reconcile net profits with cash flow from operations, while dividends are a cash outflow which is shown in the financing section of the statement.

When Preparing a Statement of Cash Flows, Retained Earnings Adjustments