In Calculating the Statement of Cash Flows, Depreciation Is Added

question 21

Multiple Choice

In calculating the statement of cash flows, depreciation is added to net income because

• A)depreciation represents a net inflow of cash.
• B)it is often a large number.
• C)it is a non-cash expense that was subtracted to initially lower the taxable income.
• D)it represents additional income for the firm.

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Definitions:

Accommodation

In cognitive development, the process of altering one's existing schemas or ways of thinking in response to new information.

Equilibration

A concept in Piaget’s cognitive development theory referring to the process of achieving mental stability where the child's internal structures match or fit the external environment.

Assimilation

A cognitive process that involves incorporating new information into existing cognitive schemas, perceptions, and understanding.

Organization

The coordinated arrangement or structure of parts within a system, or the process of arranging and coordinating elements to achieve a unified whole.