Question

In preparing a statement of cash flows using the indirect​method, the Depreciation Expense​ ________

. A. is shown as a negative cash flow under operating activities

B. is added back as an adjustment to Net Income in the operating activities section

C. is added back to Purchases of Plant Assets under investing activities

D. is shown as a negative cash flow in the investing activities section

Answer 1

The correct answer is letter "B": is added back as an adjustment to Net Income in the operating activities section.

Step-by-step explanation:

Since net income is a starting point for calculating cash flows from operating activities, depreciation costs must be added back to net income if the method being used is the indirect process. Therefore, depreciation spending is recorded in the cash flow statement.

Answer 2

Answer:B -

Explanation:Depreciation is added back as an adjustment to the net income in the operating activities section.