When the direct method is used to determine operating cash flows,how is the payment of a cash dividend shown on the statement of cash flows?

Question

Quizplus · Accepted Answer

Payment of cash dividends is considered a financing activity, as it involves the distribution of cash to shareholders, which affects the company's capital structure. Therefore, it should be shown under the financing section of the statement of cash flows when the direct method is used to determine operating cash flows.

When the Direct Method Is Used to Determine Operating Cash