Depreciation Is Added to Net Income to Calculate Cash Flow

question 32

Multiple Choice

Depreciation is added to net income to calculate cash flow because:

• A) depreciation is not a continuing expense.
• B) all other expenses are operating expenses while depreciation is a financing expense.
• C) depreciation is usually the largest expense for a company.
• D) depreciation is a non-cash expense.
• E) the amount of depreciation is the result of the accounting method used.

---

Definitions:

S-shaped

A term often used to describe a curve or growth pattern that starts slowly, accelerates, and then slows down again, resembling the letter "S."

Kaizen

A Japanese business philosophy of continuous improvement of working practices, personal efficiency, etc.

Continuous Improvement

An ongoing effort to improve products, services, or processes by making incremental enhancements over time.

Kaizen

A Japanese term meaning "continuous improvement," it's a business philosophy focusing on the ongoing improvement of processes in manufacturing, engineering, and business management.