On a reconciliation of net income to cash from operations,depreciation is added back to net income as depreciation
A) is a direct outflow of cash.
B) reduces net income but does not involve an outflow of cash.
C) reduces net income and involves an outflow of cash.
D) is an outflow of cash to a fund established for the replacement of assets.

Question

Quizplus · Accepted Answer

Depreciation is a non-cash expense that reduces net income but does not involve an outflow of cash. Therefore, it is added back to net income on a reconciliation of net income to cash from operations.

On a Reconciliation of Net Income to Cash from Operations,depreciation