When using the indirect method to prepare the statement of cash flows, depreciation should be presented as a(n):
A) cash flow from investing activities.
B) cash flow from financing activities.
C) deduction from net income.
D) addition to net income.

Question

Quizplus · Accepted Answer

Depreciation is a non-cash expense and is added back to net income in the operating activities section when using the indirect method to prepare the statement of cash flows.

When Using the Indirect Method to Prepare the Statement of Cash