If a Company Uses the Indirect Method to Prepare the Statement

question 112

Multiple Choice

If a company uses the indirect method to prepare the statement of cash flows, how can depreciation be presented on the statement of cash flows?

• A)Depreciation expense can be added to net income in the financing activities section on the statement of cash flows.
• B)Depreciation expense can be subtracted from net income in the operating section on the statement of cash flows.
• C)Depreciation expense can be added to net income in the investing activities section on the statement of cash flows.
• D)Depreciation expense can be added to net income in the operating activities section on the statement of cash flows.

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Definitions:

Sensors

Devices or instruments that detect and respond to some type of input from the physical environment, such as light, heat, motion, or pressure.

Inductive Pulse Generator

A device that generates electrical pulses through electromagnetic induction, often used in ignition systems.

Wheel Speed Sensor

A sensor used to measure the rotation speed of a vehicle's wheel, crucial for systems like ABS and traction control.

IRR

Internal Rate of Return, a financial metric used to evaluate the profitability of potential investments, representing the discount rate that makes the net present value of cash flows from a particular project equal to zero.