Depreciation expense is not a source of cash; however,it is added to net income when determining net cash flow from operations under the indirect method.

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Depreciation expense is a non-cash expense, meaning it does not involve actual cash outflows. However, it is still included in the calculation of net cash flow from operations under the indirect method because it affects net income, which is used to determine operating cash flows.

Depreciation Expense Is Not a Source of Cash; However,it Is