Which of the following would not appear on a statement of cash flows prepared using the direct method?
A) cash receipt from repayment of a loan
B) cash purchase of inventory
C) depreciation expense
D) cash payments for operating expenses

Question

Quizplus · Accepted Answer

The direct method of preparing the statement of cash flows reports all cash inflows and outflows directly. Depreciation expense is a non-cash expense and does not have a direct impact on cash flows, so it would not appear on the statement prepared using the direct method. The other options all involve actual cash inflows or outflows and would be reported on the statement of cash flows prepared using the direct method.

Which of the Following Would Not Appear on a Statement