Under the indirect method, depletion expense must be added back to net income under the operating activities.

Name: Under the indirect method, depletion expense must be added back to net income under the operating activities.
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Quizplus · Accepted Answer

Depletion expense is a non-cash expense and is deducted from revenue to arrive at net income. Therefore, it needs to be added back to net income under operating activities in the cash flow statement prepared using the indirect method.

Under the Indirect Method, Depletion Expense Must Be Added Back