Asked by Avery Burton on May 31, 2024
Verified
Depreciation on factory equipment would be reported in the statement of cash flows prepared by the indirect method in
A) the cash flows from financing activities section
B) the cash flows from investing activities section
C) a separate schedule
D) the cash flows from operating activities section
Factory Equipment
Durable goods or machinery used in manufacturing processes, typically involving production or maintenance tasks.
Indirect Method
A type of cash flow reporting in financial statements where net income is adjusted for changes in balance sheet accounts to calculate the cash flow from operating activities.
Financing Activities
Transactions that result in changes in the size and composition of the equity and borrowings of an entity, such as issuing stock or obtaining loans.
- Apprehend the modifications to net income in the calculation of net cash flow from operating activities.
Verified Answer
DQ
Devin QuickJun 01, 2024
Final Answer :
D
Explanation :
Depreciation is a non-cash expense and is considered an operating activity since it impacts the net income of the company. Therefore, it would be reported in the cash flows from operating activities section of the statement of cash flows prepared by the indirect method.
Learning Objectives
- Apprehend the modifications to net income in the calculation of net cash flow from operating activities.