Dividends declared but unpaid are reflected in the financing activities section of the statement of cash flows.

Question

Quizplus · Accepted Answer

Dividends declared but unpaid are not reflected in the financing activities section of the statement of cash flows because this section only includes cash flows related to borrowing, repaying debt, issuing stock, and paying dividends. Unpaid dividends do not affect cash until they are paid, at which point they are recorded in the financing activities section.

Dividends Declared but Unpaid Are Reflected in the Financing Activities