Which One of the Following Statements Regarding the Effect of Depreciation

question 6

Multiple Choice

Which one of the following statements regarding the effect of depreciation when reconciling net income to net cash provided by operating activities is correct?

• A)Depreciation expense is a cash outflow.
• B)Ignoring income tax effects, increasing depreciation expense will increase cash flows from operations.
• C)Depreciation expense is added in the cash flow from operations section.
• D)Depreciation expense is a source of cash.

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