Using the indirect method for cash flows,depreciation expense is added to net income to determine the:
A)cash flow from investing activities.
B)cash flow from financing activities.
C)cash flow from operating activities.
D)cash flow from fixed asset activities.

Question

Quizplus · Accepted Answer

Depreciation is a non-cash expense and is added back to net income in the operating activities section of the indirect method for cash flows because it does not impact cash flows from operating activities. Therefore, the correct choice is cash flow from operating activities.

Using the Indirect Method for Cash Flows,depreciation Expense Is Added