When using the indirect method of preparing a statement of cash flows, which of the following items would need to be added to net income in order to reconcile to cash provided by operating activities?

Question

Quizplus · Accepted Answer

Depreciation expense is added back to net income in the indirect method of preparing a statement of cash flows because it is a non-cash expense that reduces net income but does not affect cash flow.

When Using the Indirect Method of Preparing a Statement of Cash