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 Flow Statement classifies flows into: - Operating activities. - Investing activities. - Financing activities.

Step 2: Treatment of dividend.
- Dividend received → Operating (non-financial enterprises) or Investing (financial enterprises). - Dividend paid → Financing activity (since it is a return to providers of capital).

Step 3: Conclusion.
Dividend paid is shown under Financing Activities.

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