Question:
‘Dividend paid by a finance company’ is classified under which of the following?
‘Dividend paid by a finance company’ is classified under which of the following?
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Dividend paid by any company, regardless of the industry type, is classified under financing activities as it represents a return to shareholders.
Updated On: Jan 18, 2025
- Operating Activities
- Investing Activities
- Financing Activities
- Cash and Cash Equivalents
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The Correct Option is C
Solution and Explanation
- Dividend payments, whether made by a finance company or a non-finance company, are classified under financing activities. This is because they involve cash outflows to owners and are related to equity financing.
- For a finance company, only dividend received (if applicable) is considered part of operating activities.
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