Under the direct method,depreciation expense is added back to net income when computing net cash flow from operating activities.

Question

Quizplus · Accepted Answer

Under the direct method, depreciation expense is considered as a non-cash expense and is not added back to net income when computing net cash flow from operating activities. Instead, the direct method adjusts for changes in current assets and current liabilities to arrive at the net cash flow from operating activities.

Under the Direct Method,depreciation Expense Is Added Back to Net