In 2010, Garon Corp. declared and paid $50,000 in cash dividends. This payment should be classified on Garon's statement of cash flows as a(an)

Name: In 2010, Garon Corp. declared and paid $50,000 in cash dividends. This payment should be classified on Garon's statement of cash flows as a(an)
Brand: Quizplus
Rating: 4.8 (50 reviews)

Question

Quizplus · Accepted Answer

Dividends paid are considered a financing activity because they are related to the equity financing of the business. Therefore, they are classified as a financing cash outflow on the statement of cash flows.