Dividends received are shown in the cash flow statement as what?

Dividends received are shown in the cash flow statement as what?

• A. Returns on investments
• B. Operating receipts
• C. Financing cash flows
• D. Non-cash items

Answer: (A)

Dividends received are cash inflows from holding investments, so they are shown under investing activities as returns on investments. This reflects the return from owning financial assets rather than the company’s day-to-day operations, and not as financing activity or a non-cash adjustment. Operating receipts cover core business cash inflows like sales, financing cash flows relate to raising or repaying capital, and non-cash items don’t involve actual cash.

Dividends received are cash inflows from holding investments, so they are shown under investing activities as returns on investments. This reflects the return from owning financial assets rather than the company’s day-to-day operations, and not as financing activity or a non-cash adjustment. Operating receipts cover core business cash inflows like sales, financing cash flows relate to raising or repaying capital, and non-cash items don’t involve actual cash.