Asked by Mackenzie Dolishny on Jun 09, 2024
Verified
Paying dividends to stockholders represents a financing activity.
Dividends
Payments made by a corporation to its shareholder members, usually derived from the company's profits, and distributed proportionally to the amount of shares owned.
Financing Activity
Transactions with lenders or investors that involve borrowing funds, repaying loans, obtaining equity capital, and paying dividends.
- Identify the classifications of activities outlined in the statement of cash flows (operating, investing, and financing) and the specific transactions encompassed within each category.
Verified Answer
VS
Vinay SreedharaJun 11, 2024
Final Answer :
True
Explanation :
Paying dividends to stockholders represents a distribution of profits to the owners of the company and is considered a financing activity on the statement of cash flows.
Learning Objectives
- Identify the classifications of activities outlined in the statement of cash flows (operating, investing, and financing) and the specific transactions encompassed within each category.