Depreciation expense,using the indirect method of preparing the statement of cash flows,is ________.
A)added to net income
B)subtracted from net income
C)subtracted from investing activities
D)added to investing activities

Question

Quizplus · Accepted Answer

Depreciation expense is a non-cash expense that reduces net income on the income statement. When preparing the statement of cash flows using the indirect method, depreciation expense is added back to net income to adjust for the fact that it did not involve an actual outflow of cash during the period.

Depreciation Expense,using the Indirect Method of Preparing the Statement of Cash