A Company's Income Statement Reports $30,000 Depreciation Expenses During the Period

question 45

Multiple Choice

A company's income statement reports $30,000 depreciation expenses during the period. Using the direct method to prepare the statement of cash flows, how would the depreciation expense be reported on the statement of cash flows?

• A)Depreciation expense would be an addition under investing activities.
• B)Depreciation expense would be an addition under financing activities.
• C)Depreciation expense would be a deduction under operating activities.
• D)Depreciation expense would not be reported on the statement of cash flows.

Understand the process of preparing the statement of cash flows using the indirect method.

Identify and classify activities as operating, investing, or financing within the statement of cash flows.

Reconcile net income to net cash flow from operating activities.

Identify the reporting of transactions involving sale and purchase of assets in the statement of cash flows.

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Definitions:

Macrosystem

The broadest context in ecological systems theory, encompassing the overarching patterns and influences of a society, including its culture, economy, and laws.

Bronfenbrenner's

Relates to the ecological systems theory developed by Urie Bronfenbrenner, highlighting the complex layers of environment that influence individual development.

Society

A group of individuals living together in a more or less ordered community, sharing customs, laws, and organizations.

Recessive

A type of genetic trait or allele that is expressed in an organism only when two copies of the gene or allele are present.