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.
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.
举一反三
- Which of the following is NOT a reason why cash flow may not equal net income? A: Amortization is added in when calculating net income. B: Changes in inventory will change cash flows but not income. C: Capital expenditures are not recorded on the income statement. D: Depreciation is deducted when calculating net income.
- While preparing a statement of cash flows using the indirect method, the 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.
- Depreciation expense is not reported on a statement of cash flows prepared under the direct method.
- 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