Depreciation expense is not reported on the statement of cash flows when the direct method is used.

Name: Depreciation expense is not reported on the statement of cash flows when the direct method is used.
Brand: Quizplus
Rating: 4.7 (32 reviews)

Question

Quizplus · Accepted Answer

Depreciation expense is a non-cash expense that is added back to net income when using the indirect method to calculate cash flows. However, with the direct method, depreciation is not included as a separate line item in the operating activities section of the statement of cash flows.

Depreciation Expense Is Not Reported on the Statement of Cash