Question : Payment of dividend in a Cash flow statement is
Option 1: Payment of dividend will be shown as outflow under 'Cash flows from financing activities'.
Option 2: Payment of dividend will be shown as inflow under 'Cash flows from financing activities'.
Option 3: Payment of dividend will be shown as outflow under 'Cash flows from investing activities'.
Option 4: None of the above
Correct Answer: Payment of dividend will be shown as outflow under 'Cash flows from financing activities'.
Solution : Answer = Payment of dividend will be shown as outflow under 'Cash flows from financing activities'.
When a dividend is paid it should be shown as an outflow of cash flow from financing activities because financing activities are the activities which result in a change in the size and composition of the owner's capital and borrowing of the enterprise from other sources. Hence, the correct option is 1.
Question : Where will you show purchase of intangible assets in a Cash Flow Statement?
Option 1: Shown as outflow under 'Cash flows from investing activities'.
Option 2: Shown as outflow under 'Cash flows from operating activities'.
Option 3: Shown as inflow under 'Cash flows from investing activities'.
Question : In cash flow statement, Adjustment for payment of tax is
Option 1: Payment of tax will be deducted under 'Cash flows from operating activities'
Option 2: Payment of tax will be added under 'Cash flows from operating activities'
Option 3: Payment of tax will be deducted under 'Cash flows from Financing activities'
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