Which of the following items would not be classified as an operating activity on the statement of cash flows?

Cash received from customers.

Dividends paid to the company's own stockholders.

Payments to government agencies for taxes.

Cash paid to compensate employees.

Dividends paid to the company's own stockholders

Question

Business

Alissa Harper

2 June, 05:01

Which of the following items would not be classified as an operating activity on the statement of cash flows?

Cash received from customers.

Dividends paid to the company's own stockholders.

Payments to government agencies for taxes.

Cash paid to compensate employees.

Dividends paid to the company's own stockholders

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Answers (1)

Know the Answer?

Helen Hanna · Answer 1

The correct answer is the option B: Dividends paid to the company's own stockholders.

Explanation:

To begin with, a ''statement of cash flows'', in financial accounting, is the name given to the financial statement that shows how changes in the cash and cash equivalents affects the balance sheet. Moreover this financial statement is partitioned into three differents segments that are normally: operating activities, investing activities and financing activities.

Secondly, the action or situation of paying dividends to the company's own stockholders goes to the financing activities segment due to the fact that this segment includes the inflow of cash from investors such as banks and shareholders. Meanwhile, the operating activities segment includes the actions that involves the current activity of the company such as production, sales and delivery of those goods as well as receiving payments from customers too.