In applying the indirect method,depreciation expense is ________.
A)added to net income because it does not require a payment of cash
B)subtracted from net income because it is a non-cash expense
C)subtracted from cash from operating activities because it is a non-cash expense
D)not shown on the statement of cash flows prepared using the indirect method

Question

Quizplus · Accepted Answer

Depreciation expense is added back to net income in the cash flow statement when using the indirect method because it is a non-cash expense that had reduced net income.

In Applying the Indirect Method,depreciation Expense Is ________