There are several types of adjustments required to compute cash flow from operations from net income. One adjustment is an addition to net income each year for _____ because it uses no cash during that period.
A)payments to employees
B)payments to suppliers
C)tax payments
D)depreciation and amortization
E)none of the above

Question

Quizplus · Accepted Answer

Depreciation and amortization are non-cash expenses that reduce net income but do not use any cash during the period. Therefore, they need to be added back to net income to calculate cash flow from operations.

There Are Several Types of Adjustments Required to Compute Cash