Asked by Story Kremin on Jun 13, 2024
Verified
Depreciation is considered in which area of the Statement of Cash Flows?
A) Operating activities
B) Investing activities
C) Financing activities
D) Income activities
Statement of Cash Flows
A financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company, showing how the company's operations are running, where its money is coming from, and how it is being spent.
Depreciation
The process of allocating the cost of a tangible asset over its useful life, representing how much of the asset's value has been used.
Operating Activities
Day-to-day actions that are involved in running a business, which include production, sales, and material purchasing, related to the company's core business operations.
- Recognize different elements and processes influencing the cash flow statement and comprehend the management of cash flows.
Verified Answer
JB
Jeremy BernardJun 14, 2024
Final Answer :
A
Explanation :
Depreciation is considered in the operating activities section of the Statement of Cash Flows because it is a non-cash expense that is subtracted from net income to arrive at cash flows from operating activities.
Learning Objectives
- Recognize different elements and processes influencing the cash flow statement and comprehend the management of cash flows.