Asked by Blake Archer on May 09, 2024
Verified
On a statement of cash flows using the indirect method, depreciation expense will
A) be added to net income in the operating activities section.
B) be deducted from net income in the operating activities section.
C) appear a cash receipt in the investing activities section.
D) be ignored.
Depreciation Expense
The allocated portion of the cost of a tangible or physical asset that is charged as an expense over its useful life.
Operating Activities
Activities directly related to the business's primary operations, such as selling products or services, which are reflected in the company's cash flow.
Net Income
Net income is the total profit a company generates after subtracting all its expenses, taxes, and losses from its total revenue.
- Recognize the treatments of specific items (e.g., depreciation, gains, and losses) in the statement of cash flows.
Verified Answer
Learning Objectives
- Recognize the treatments of specific items (e.g., depreciation, gains, and losses) in the statement of cash flows.
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