Which of the following is a financing activity A Collecting

Which of the following is a financing activity?

A) Collecting cash from customers

B) Collecting cash from the sale of a building

C) Paying cash dividends

D) Paying cash to purchase land

Solution

The correct option is

C) Paying cash dividends.

Cash dividend payment is an outflow shown in the financing section in the cash flow statement which decreases the cash balances from financing activities for the period.