In Preparing the Statement of Cash Flows for Year 4

question 61

Multiple Choice

In preparing the statement of cash flows for Year 4, internal records indicate that depreciation on manufacturing facilities totaled $800.The firm included this amount in cost of goods sold in the income statement for Year 4.None of the of depreciation required an operating cash flow during Year 4.The T-account work sheet entry adds back the $800 of depreciation on manufacturing facilities.Accountants treat depreciation charges on manufacturing facilities as

• A)a period expense.
• B)an opportunity cost.
• C)a product cost.
• D)a cost of capital.
• E)a marginal cost.

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