Which of the following would not appear on a statement of cash flows prepared using the direct method?
A)Cash receipts from customers
B)Cash payments for insurance
C)Depreciation expense
D)Cash payments for salaries and wages

Question

Quizplus · Accepted Answer

Depreciation expense would not appear on a statement of cash flows using the direct method because it is a non-cash expense. The direct method reports actual cash inflows and outflows occurring during the period, while depreciation is a non-cash expense that is added back to net income when calculating net cash provided by operating activities. A statement of cash flows using the indirect method would include depreciation among the adjustments made to net income to arrive at net cash provided by operating activities.

Which of the Following Would Not Appear on a Statement