Paying taxes to governmental bodies is considered a cash outflow in the operating activities section on the statement of cash flows.

True or False?

true

Explanation:

tax is a compulsory financial charge imposed upon on a tax payer by the government. In preparation of a company profit or loss account and other comprehensive statement, it is mandatory that the company is expected to deduct the approved tax rate after arriving at its operating profit. paying of taxes is a cash outflow in the operating activities of a cash flow statement because it is paid within one year and paid from the operating activities of the company.