When Using the Indirect Method to Determine Operating Cash Flows

question 178

Multiple Choice

When using the indirect method to determine operating cash flows, how is depreciation expense recorded on the Statement of Cash Flows?

• A)operating activity
• B)investing activity
• C)financing activity
• D)noncash investing and financing activity
• E)not reported on the statement of cash flows

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Definitions:

Gross Income

The total income from all sources before deductions, taxes, and expenses.

Market Value

The current price at which an asset or service can be bought or sold in the marketplace, determined by supply and demand.

Property Taxes

Taxes paid by property owners based on the assessed value of their real estate.

Gross Income

The total income from all sources before any deductions or taxes are taken out.