The statement of cash flows (indirect method) reports depreciation expense as an addition to net income because depreciation
A. causes an inflow of funds for the replacement of assets.
B. reduces reported net income of the period but does not involve an outflow of cash for that period.
C. is a direct use of cash.
D. reduces reported net income and causes an inflow of cash.
Frequently Asked Questions
What scientific concept do you need to know in order to solve this problem?
Our tutors have indicated that to solve this problem you will need to apply the Operating Activities: Indirect Method concept. You can view video lessons to learn Operating Activities: Indirect Method. Or if you need more Operating Activities: Indirect Method practice, you can also practice Operating Activities: Indirect Method practice problems.
What is the difficulty of this problem?
Our tutors rated the difficulty ofThe statement of cash flows (indirect method) reports deprec...as medium difficulty.
What professor is this problem relevant for?
Based on our data, we think this problem is relevant for Professor Kreiser's class at ISU.