In calculating net cash from operating activities using the indirect method, depreciation expense is
A) deducted from net income.
B) added to net income.
C) ignored because it does not affect income.
D) ignored because it is included in the investing section.

Question

Quizplus · Accepted Answer

Depreciation expense is added back to net income in the indirect method of calculating cash flows from operating activities because it is a non-cash expense that reduced net income but did not involve an outflow of cash.

In Calculating Net Cash from Operating Activities Using the Indirect