In Applying the Direct Method,depreciation Expense Is ________

question 158

Multiple Choice

In applying the direct method,depreciation expense is ________.

• A)added to net income because purchases of the depreciable long-term assets are investing activities
• B)subtracted from net income because it is a non-cash expense
• C)subtracted from cash from operating activities because it is a non-cash expense
• D)not shown on the statement of cash flows prepared using the direct method

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Definitions:

Direct Labor

The wages or salaries paid to employees who are directly involved in producing goods or providing services.

Electric Power

Electric power is the rate at which electrical energy is transferred by an electric circuit, commonly utilized for domestic, commercial, and industrial activities.

Fixed Costs

Expenses that do not change with the level of goods or services produced over the short term, such as rent or salaries.

Continuous Budgeting

A process of continuously updating the budget by adding a new period as the current period is completed, ensuring the budget always extends a fixed period into the future.