Which of the following is a cash outflow for a financing activity on the statement of cash flows?
A)payment of interest on a loan
B)payment for purchasing inventory
C)payment of dividends
D)payments to the government for taxes

Question

Quizplus · Accepted Answer

Payment of dividends is a cash outflow for financing activities as it involves distributing profits to shareholders. Payment of interest on a loan is a cash outflow for operating activities as it is a cost of borrowing money. Payment for purchasing inventory is a cash outflow for investing activities as it is a cost of acquiring assets for the business. Payments to the government for taxes is a cash outflow for operating activities as it is a cost of doing business.

Which of the Following Is a Cash Outflow for a Financing