Payment of Dividends is considered:
A) an outflow of cash under Financing activities.
B) an inflow of cash under Financing activities.
C) an outflow of cash under Investing activities.
D) an outflow of cash under Operating activities.

Question

Quizplus · Accepted Answer

Payment of dividends is classified as a financing activity because it relates to the equity or debt financing of the business. It represents a return of capital to shareholders or payment of interest to debt holders, which are considered financing activities.

Payment of Dividends Is Considered