When Using the Indirect Method to Complete the Cash Flows

question 77

Multiple Choice

When using the indirect method to complete the cash flows from operating activities section of the statement of cash flows,what is the proper disposition of depreciation expense?

• A)Subtract depreciation from net income.
• B)Add depreciation to net income.
• C)Disregard depreciation because it relates to an investing activity.
• D)Disregard depreciation because it is a noncash expense.

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Definitions:

Resource Reduction

Strategies or actions taken to decrease the amount of resources used, including materials, energy, and labor, often to improve efficiency or sustainability.

Climate Change

Long-term significant changes in the patterns of temperature, precipitation, and weather phenomena attributed largely to human activities.

Carbon Dioxide

A colorless, odorless gas produced by burning carbon and organic compounds and by respiration. It is naturally present in air and is a major component of the carbon cycle.

Transportation Costs

Expenses involved in moving goods from one location to another, including shipping, fuel, and labor.