Depreciation Expense is not reported on the statement of cash flows when prepared using the direct method.

Name: Depreciation Expense is not reported on the statement of cash flows when prepared using the direct method.
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Question

Quizplus · Accepted Answer

The direct method converts revenues to cash inflows and expenses to cash outflows.Since depreciation is a noncash expense,it would not appear in the operating activities section of the statement of cash flows prepared using the direct method.

Depreciation Expense Is Not Reported on the Statement of Cash