The Statement of Cash Flows (Indirect Method)reports Depreciation Expense as an Addition

question 89

Multiple Choice

The statement of cash flows (indirect method) reports depreciation expense as an addition to profit because depreciation does which of the following?

• A)causes an inflow of funds for the replacement of assets.
• B)reduces reported profit of the period but does not involve an outflow of cash for that period.
• C)is a direct use of cash.
• D)reduces reported profit and causes an inflow of cash.

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Definitions:

Free-Flow Layout

A type of layout used by small retail stores that encourages customers to wander and browse through the store.

Encourages Customers

Strategies or actions taken by businesses to motivate potential buyers to purchase their products or services, often through promotions, excellent customer service, and engaging marketing.

Incubator

A program or facility designed to help new and startup companies develop by providing services such as management training or office space.

Lower-Than-Market Rent

Rental rates offered at a price below the current market average, often used as an incentive or for strategic reasons.