Depreciation expense reduces operating income but does not require the use of cash.
举一反三
- In order to convert the average annual net cash inflow from the asset back to the average annual operating income from the asset, one must ( ) A: subtract annual depreciation expense B: add annual depreciation expense C: multiply by annual depreciation expense D: divide by annual depreciation expense
- Which of the following items is included in the adjustment of net income to obtain cash flow from operating activities? ( ) A: Depreciation expense for the period. B: dividend C: The amount by which equity income recognized exceeds cash received. D: The change in deferred taxes.
- Which of the following statements regarding depreciation expense in the cash flow statements is TRUE Depreciation is: A: added back to net income when determining CFO using the direct method. B: added back to net income when determining CFO using the indirect method. C: considered a cash item.
- Depreciation expense is not reported on a statement of cash flows prepared under the direct method.
- While preparing a statement of cash flows using the indirect method, the Depreciation Expense ________.