On a statement of cash flows using the indirect method, depreciation expense will
A)be added to profit in the operating activities section.
B)be deducted from profit in the operating activities section.
C)appear as an inflow of cash in the investing activities section.
D)be ignored.

Question

Quizplus · Accepted Answer

Depreciation expense is a non-cash charge that reduces net income, so it is added back to profit in the operating activities section to reconcile net income to net cash provided by operating activities.

On a Statement of Cash Flows Using the Indirect Method