A company uses the direct method of preparing the statement of cash flows. Current year depreciation expense can be found on the
A)balance sheet and income statement.
B)income statement and statement of cash flows.
C)income statement only.
D)statement of cash flows only.

Question

Quizplus · Accepted Answer

Depreciation expense is a non-cash item and is reported on the income statement. Therefore, it can be found on the income statement only in the direct method of preparing the statement of cash flows.

A Company Uses the Direct Method of Preparing the Statement