Dividend paid by a company to its shareholder is classified as which type of activity under cash flow statement?
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- Cash flow from operating activities
- Cash flow from investing activities
- Cash flow from financing activities
- Cash flow from extraordinary activities
The Correct Option is C
Solution and Explanation
Step 1: Understand cash flow classification.
As per AS-3 (Revised) and Ind AS 7, Cash Flow Statement classifies flows into:
- Operating activities.
- Investing activities.
- Financing activities.
Step 2: Treatment of dividend.
- Dividend received → Operating (non-financial enterprises) or Investing (financial enterprises).
- Dividend paid → Financing activity (since it is a return to providers of capital).
Step 3: Conclusion.
Dividend paid is shown under Financing Activities.
Final Answer: \[ \boxed{\text{Cash flow from financing activities}} \]
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