Both the lessee's interest and depreciation expense should be added back to net income to calculate cash flows from operating activities under the indirect method.

Question

Quizplus · Accepted Answer

Only the lessee's interest should be added back to net income when calculating cash flows from operating activities under the indirect method. Depreciation expense is already a non-cash charge that is added back to net income in the calculation.

Both the Lessee's Interest and Depreciation Expense Should Be Added