Depreciation expense is deducted from net income in determining cash flows provided by operating activities under the indirect method.

Name: Depreciation expense is deducted from net income in determining cash flows provided by operating activities under the indirect method.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Depreciation does not involve cash. It is added back to net income in the operating section of the statement of cash flows under the indirect method because it was deducted in determining net income though it did not use cash.

Depreciation Expense Is Deducted from Net Income in Determining Cash