Rock Company uses the indirect method to prepare its statement of cash flows. Rock's Accumulated Depreciation- Equipment account increased during the period. Rock did not purchase or sell equipment during the period. The increase in Accumulated Depreciation- Equipment is:

Question

Quizplus · Accepted Answer

The increase in Accumulated Depreciation is added back to net income in the operating activities section because it is a non-cash expense that reduces net income but does not affect cash flow.

Rock Company Uses the Indirect Method to Prepare Its Statement