Which of the following changes in retained earnings during a period will be reported in the financing activities section of the cash flow statement?
1) Declaration of a cash dividend paid during the period.
2) Profit for the period.
A) 1
B) 2
C) neither 1 nor 2.
D) both 1 and 2.

Question

Quizplus · Accepted Answer

The declaration and payment of a cash dividend, which directly affects retained earnings, is reported in the financing activities section of the cash flow statement. Profit for the period affects retained earnings but is reported in the operating activities section, not the financing activities section.

Which of the Following Changes in Retained Earnings During a Period