When Using the Indirect Method to Complete the Cash Flows

question 96

Multiple Choice

When using the indirect method to complete the cash flows from operating activities section of the statement of cash flows, what is the proper disposition of depreciation expense?

• A)Add depreciation expense to net income.
• B)Subtract depreciation expense from net income.
• C)Disregard depreciation expense because it relates to an investing activity.
• D)Disregard depreciation expense because it is a non-cash expense.

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Definitions:

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