When Preparing the Operating Activities Section of the Statement of Cash

question 149

True/False

When preparing the operating activities section of the statement of cash flows using the indirect method, depreciation is added to net income.

---

Definitions:

Lead Time Variability

The inconsistency or fluctuation in the amount of time it takes to complete the process from order to delivery, affecting supply chain efficiency.

Cycle Service Level

A metric that measures the probability of meeting customer demand without stockouts over a standard ordering cycle, reflecting inventory efficiency and customer satisfaction.

Periodic Review Policies

Inventory management approaches where stock levels are reviewed and possibly adjusted at regular intervals, regardless of demand patterns.

Review Interval

The scheduled time period between assessments or evaluations of a system, process, or set of data to ensure accuracy and efficiency.