On your cash flow statement, you will need to ________ the amount you deducted from the income statement as a depreciation expense.

Question

Quizplus · Accepted Answer

Depreciation expense is a non-cash expense that was deducted from the income statement to determine net income. However, since it is a non-cash expense, it does not affect the actual cash balance of the business. Therefore, it needs to be added back to the net income when preparing the cash flow statement to show the actual cash inflows and outflows of the business.

On Your Cash Flow Statement, You Will Need to ________