In a Statement of Cash Flows (Indirect Method),depreciation Is Treated

question 30

Multiple Choice

In a statement of cash flows (indirect method) ,depreciation is treated as an adjustment to reported net income because depreciation

• A) is an inflow of cash to a reserve account for asset replacement.
• B) reduces the reported net income and involves an inflow of cash.
• C) reduces the reported net income but does not involve an outflow of cash.
• D) usually represents a significant portion of operating expenses.

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