The payment of dividends is a financing activity.

Name: The payment of dividends is a financing activity.
Brand: Quizplus
Rating: 4.8 (56 reviews)

Question

Quizplus · Accepted Answer

The payment of dividends is a financing activity because it involves sharing profits with shareholders by transferring funds from the company's equity account to its cash account. It reduces the company's retained earnings, which is a component of its equity, thereby decreasing the amount of funding available for investment and growth.

The Payment of Dividends Is a Financing Activity