Which of the Following Is Not Correct About the Statement

question 103

Multiple Choice

Which of the following is not correct about the statement of cash flows?

• A)Paying dividends to investors creates a cash outflow from financing activities.
• B)A purchase of equipment is classified as a cash outflow from investing activities.
• C)Cash dividends paid are classified as cash flows from operating activities.

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Definitions:

Shareholders

Individuals or entities that own one or more shares of stock in a public or private corporation, giving them a right to a portion of the company's profits and assets.

Limited Liability

A legal structure that restricts the amount of money that owners or shareholders can lose in case the company fails, limiting their loss to the amount they have invested in the company.

Direct Management

The process of overseeing and directly controlling operations or tasks without intermediary levels of command.

Charter

A legal document that establishes a corporation or other organization, outlining its purpose, activities, and rights.