Question

Dividend paid by a company to its shareholder is classified as which type of activity under cash flow statement?

• A. Cash flow from operating activities
• B. Cash flow from investing activities
• C. Cash flow from financing activities
• D. Cash flow from extraordinary activities

Hint:

Remember: Dividend paid = Financing activity. Interest paid = Financing for financial enterprises, Operating for non-financial enterprises.

Answer 1

The Correct Option is C

Step 1: Understand cash flow classification.
As per AS-3 (Revised) and Ind AS 7, cash flows are categorized as:- Operating activities.- Investing activities.- Financing activities.

Step 2: Treatment of dividend.
- Dividend received is classified as Operating (for non-financial enterprises) or Investing (for financial enterprises).- Dividend paid is a Financing activity, representing a return to capital providers.

Step 3: Conclusion.
Dividend payments are reported under Financing Activities.

Final Answer: \[\boxed{\text{Cash flow from financing activities}}\]