Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

Dividend received is:

Options:

Operating activity

Financing activity

Investing activity

Cash and cash equivalents

Correct Answer:

Investing activity

Explanation:

The correct answer is option 3- Investing activity.

Dividend received is an investing activity. Operating activities involve the core business operations and transactions related to generating revenue whereas investing activities involve the acquisition and disposal of long-term assets, including investments in securities and dividends received from those investments. So, Dividend received on investment made by the company in another company is an investing activity.