How Is Depreciation Expense Treated in the Statement of Cash

question 118

Multiple Choice

How is depreciation expense treated in the Statement of Cash Flows and related disclosures when the statement is prepared using the indirect format?

• A) added to net income
• B) subtracted from net income
• C) placed into the investing section
• D) does not appear because it is not a cash flow

---

Definitions:

Statute of Frauds

A legal principle requiring certain contracts to be in writing and signed by the parties involved to be enforceable.

Subject of Agreement

The specific matter or issue that is being agreed upon or contracted between parties.

Identification of Parties

The process of clearly determining and naming the individuals or entities involved in a legal agreement or dispute.

Uniform Commercial Code

A comprehensive set of laws governing all commercial transactions in the United States, intended to standardize and harmonize the law of sales and other commercial transactions across the country.