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Which item is not classified as a cash flow from investing activities? A. Receipt from the sale...

Question:

Which item is not classified as a cash flow from investing activities?

A. Receipt from the sale of premises

B. Payment for shares to be held as an investment

C. Dividends paid to investors

D. Cash purchase of office furniture

Dividend Paid:

The dividend is paid at a fixed period to the shareholders of the company. It also decreases the retained earnings of the company as the dividend is paid from the retained earnings.

Answer and Explanation:

The correct answer is option C i.e Dividends paid to investors.

The dividend paid to the investors is not the investing activities. It is included in the financing activities and when the dividend is paid, it results in an outflow of the cash.


Learn more about this topic:

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Operating Cash Flow: Definition & Examples

from Finance 101: Principles of Finance

Chapter 10 / Lesson 4
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