When using the direct method, how is depreciation expense recorded on the statement of cash flows?
A) Operating activity
B) Investing activity
C) Financing activity
D) Not reported on the statement of cash flows

Question

Quizplus · Accepted Answer

Depreciation expense is a non-cash charge and does not affect cash flow, thus it is not reported on the statement of cash flows when using the direct method.

When Using the Direct Method, How Is Depreciation Expense Recorded