When Using the Direct Method, How Is Depreciation Expense Recorded

question 180

Multiple Choice

When using the direct method, how is depreciation expense recorded on the statement of cash flows?

• A) Operating activity
• B) Investing activity
• C) Financing activity
• D) Not reported on the statement of cash flows

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Definitions:

Profit

The financial gain obtained when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Pigeon Pies

A traditional dish made from pigeons, emblematic of historical culinary practices, but may vary in relevance and popularity across cultures.

Output

The total amount of goods or services produced by a person, machine, factory, country, etc., usually measured over a specific period of time.

Profit

The profit achieved when the revenue from business operations surpasses all associated expenses, costs, and taxes required to maintain those operations.