An increase in the accumulated depreciation account of $50,000 over the course of a year would be shown on the company's statement of cash flows prepared under the indirect method as:
A) an addition to net income of $50,000 in order to arrive at net cash provided by operating activities.
B) a deduction from net income of $50,000 in order to arrive at net cash provided by operating activities.
C) an addition of $50,000 under investing activities.
D) a deduction of $50,000 under investing activities.

Question

Quizplus · Accepted Answer

Accumulated depreciation is a non-cash expense. Under the indirect method, it is added back to net income to calculate net cash provided by operating activities.

An Increase in the Accumulated Depreciation Account of $50,000 Over