Depreciation Is Added Back to Net Income in a Statement

question 209

Multiple Choice

Depreciation is added back to net income in a statement of cash flows prepared using the indirect method because it:

• A)reduces net income but not cash.
• B)is a cash inflow.
• C)is a revenue.
• D)is a valuation concept.

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Definitions:

College Cafeteria

A dining area within a college or university where students, faculty, and staff can purchase and eat meals.

Leftovers

Food that remains uneaten at the end of a meal and is often saved for later consumption.

Roommate

A person with whom one shares a living facility such as a room or apartment but is not related or romantically involved with.

Content Validity

The extent to which a test measures all aspects of the concept or construct it intends to assess.