Under the direct method of cash flow,which of the following is not included in the statement of cash flows?
A)Changes in accounts payable
B)Changes in accounts receivable
C)Changes in depreciation
D)Changes in inventory

Question

Quizplus · Accepted Answer

Changes in depreciation are not included in the direct method of cash flow because depreciation is a non-cash expense, meaning it does not involve any actual cash transactions. The direct method focuses on cash inflows and outflows, so only actual cash transactions with third parties are included. Changes in accounts payable, accounts receivable, and inventory are all included because these accounts involve actual cash movements in and out of the business.

Under the Direct Method of Cash Flow,which of the Following