A cash dividend payment to shareholders during the year should be reported on the statement of cash flows as:
A) A decrease in cash flows from operating activities
B) A decrease in cash flows from investing activities
C) A decrease in cash flows from financing activities
D) An increase in cash flows from investing activities
E) An increase in cash flows from financing activities

Question

Quizplus · Accepted Answer

Cash dividends paid to shareholders are considered a financing activity, as they represent a return of capital to the owners of the company. Therefore, they are reported as a decrease in cash flows from financing activities on the statement of cash flows.

A Cash Dividend Payment to Shareholders During the Year Should