Which of the Following Statements Is Incorrect,regarding the Effect of Depreciation

question 89

Multiple Choice

Which of the following statements is incorrect,regarding the effect of depreciation expense on a statement of cash flows using the indirect method?

• A)Depreciation expense is not an outflow of cash.
• B)Depreciation expense represents an inflow of cash.
• C)Depreciation expense is added in the operating activities section of the statement of cash flows.
• D)Depreciation expense is not a source of cash.
• E)Depreciation expense will reduce the net income used in determining net cash flow from operations.

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Definitions:

Oxidation-Reduction

A chemical process involving the transfer of electrons between two substances, affecting their oxidation states and energy levels.

Reversible Reaction

A chemical reaction that can proceed in both directions, where products can revert to the original reactants under certain conditions.

Product Formation

The creation of end products in a chemical reaction, often catalyzed by enzymes in biological systems.

Reactant Formation

The process in a chemical reaction where substances (reactants) combine or change to produce new substances (products).