Question

Cash dividends paid on capital stock would be reported in the statement of cash flows in a.the Cash flows from investing activities section b.the Cash flows from operating activities section c.the Cash flows from financing activities section d.a separate schedule

Answer 1

Answer: The answer is c.the Cash flows from financing activities section

Explanation: Cash flows from financing activities section of the statement of cash flows provides an insight on how the company is funded. It shows the net cash flows used in funding the company. Transactions that appear under that section comprise debt, equity and dividends.

Investors analyze this section of the cash flows to know how the capital structure of an organization is managed to further understand the financial strength of the organization.