CAF-1 · Chapter 14 · Question 13 of 15
A company pays a dividend to its shareholders. Under IAS 7, this cash outflow is typically classified as:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A financing activity (or alternatively, an operating activity).
Explanation
Dividends paid are a cost of obtaining financial resources and are typically classified as financing activities, though classifying them as operating to show the ability to pay dividends from operations is allowed.
More IAS 7 Statement of Cash Flows MCQs
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