When Preparing the Statement of Cash Flows Using the Indirect

question 46

Multiple Choice

When preparing the statement of cash flows using the indirect method for determining net cash flows from operating activities, depreciation is added to net income because:

• A) It was deducted as an expense on the income statement, but does not require cash.
• B) It was deducted as an expense on the income statement and affects the amount of cash.
• C) It is a significant portion of the year's expenses.
• D) It represents a source or inflow of cash.

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Definitions:

Cultural Occurrence

An event or particular instance of behavior that is influenced by and typical within a specific culture.

Different Cultures

The diverse sets of norms, values, beliefs, customs, and practices that define the social and cultural identity of various groups of people around the world.

Unlearned Tendencies

Innate behaviors or predispositions not acquired by learning or experience.

Facial Expressions

Visible changes in the face that convey an individual's emotions to others, including happiness, sadness, anger, and fear.