When Using the Indirect Method,how Would the Declaration and Payment

question 127

Multiple Choice

When using the indirect method,how would the declaration and payment of cash dividends be shown on the statement of cash flows?

• A)As an operating activities
• B)As an investing activities
• C)As a financing activities
• D)As a noncash investing and financing activities

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Definitions:

Operating Activities

Activities that relate to the primary operations of a company, influencing its net cash flow from operating income.

Indirect Method

A way of reporting net cash flow from operating activities in the statement of cash flows by adjusting net income for changes in working capital items and non-cash transactions.

Statement of Cash Flows

This financial statement provides an overview of a company's cash inflow and outflow over a period, detailing sources and uses of cash from operating, investing, and financing activities.

Operating Activities

Operating activities refer to the day-to-day functions involved in running a business, which are directly related to its primary activities and include generating revenue and paying expenses.