In a Statement of Cash Flows, the Payment of a Cash

question 48

Multiple Choice

In a statement of cash flows, the payment of a cash dividend on common stock outstanding should be classified as cash outflows for

• A)operating activities
• B)investing activities
• C)lending activities
• D)financing activities

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Definitions:

Indirect Cost

Indirect costs are expenses not directly tied to the production of goods or services, such as overhead costs including utilities, rent, and administrative salaries.

Oil Lubricants

Substances used to reduce friction between surfaces in mutual contact, which ultimately reduces the heat generated when the surfaces move.

Factory Machinery

Tools and equipment designed for use in the manufacturing process within a factory to produce goods and products.

Rent Expense

The cost incurred for renting property or equipment used in business operations, recognized as an expense on the income statement.