Dividends received are shown on the cash flow statement under which section?

Dividends received are shown on the cash flow statement under which section?

• A. Operating activities
• B. Investing activities
• C. Financing activities
• D. Supplementary information

Answer: (B)

Dividends received are cash inflows from returns on investments in other entities’ equity instruments. These flows arise from holding investments, so they are part of investing activities rather than the normal operating activities of the business or financing transactions (like borrowing or paying dividends to owners). Therefore, they appear in the investing activities section of the cash flow statement.

Dividends received are cash inflows from returns on investments in other entities’ equity instruments. These flows arise from holding investments, so they are part of investing activities rather than the normal operating activities of the business or financing transactions (like borrowing or paying dividends to owners). Therefore, they appear in the investing activities section of the cash flow statement.