How is depreciation expense treated in the Statement of Cash Flows and related disclosures when the statement is prepared using the indirect format?
A) added to net income
B) subtracted from net income
C) placed into the investing section
D) does not appear because it is not a cash flow

Question

Quizplus · Accepted Answer

Depreciation expense is added back to net income in the operating activities section of the Statement of Cash Flows when using the indirect method because it is a non-cash expense that had reduced net income.

How Is Depreciation Expense Treated in the Statement of Cash