- CFA Exams
- CFA Level I Exam
- Study Session 7. Financial Reporting and Analysis (2)
- Reading 23. Understanding Cash Flow Statements
- Subject 1. Classification of Cash Flows and Non-Cash Activities
CFA Practice Question
A payment of a cash dividend represents a cash outflow from ______.
A. operating activities under the direct method only
B. investing activities
C. financing activities
Explanation: The payment of a dividend is a cash outflow from financing activities because the payment of a dividend provides owners with a return on their investment.
User Contributed Comments 3
| User | Comment |
|---|---|
| davcer | under ifrs it also can be cfo |
| chris297 | Under US GARP, it must be CFO. Under IFRS, it could also be CFI as well as CFO. So we assume IFRS if the question does not state which accounting standard should be followed. |
| cmacewen | Christ that is incorrect ; under US GAAP dividends paid must be classed as CFF - it is under IFRS that they may be classed as either CFO or CFF. We also assume US GAAP unless stated so please don't spread spurious information with such hubris. |