Avatar Company uses the indirect method to prepare its statement of cash flows. Please refer to the following portion of the comparative balance sheet:
Note: Net income for the year was $49,000.
Dividends of $10,000 will be shown as a positive cash flow in the financing section of the statement of cash flows.

Question

Avatar Company uses the indirect method to prepare its statement of cash flows. Please refer to the following portion of the comparative balance sheet:
  Note: Net income for the year was $49,000.
Dividends of $10,000 will be shown as a positive cash flow in the financing section of the statement of cash flows.

Quizplus · Accepted Answer

Dividends paid are shown as a negative cash flow in the financing section of the statement of cash flows, not a positive cash flow.

Avatar Company Uses the Indirect Method to Prepare Its Statement