How Does Depreciation Appear on the Statement of Cash Flows

question 84

Multiple Choice

How does depreciation appear on the statement of cash flows under the direct method?

• A)Added in the operating activities section
• B)Subtracted in the operating activities section
• C)In the investing activities section since it relates to plant assets
• D)It will not be reported since it is not a cash flow.

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Definitions:

Jet Pumps

Mechanical devices that use a high velocity jet of fluid to entrain a lower pressure fluid and raise its pressure.

Uni-directional

Capable of moving or operating in only one direction, often used in reference to devices or mechanical components.

Maximum Twisting Force

The highest torque a rotating shaft or component can withstand without yielding or failing.

Rated Horsepower

The measure of an engine's or motor's horsepower as officially designated by the manufacturer.