Question

(Ch. 11)

Depreciation expense and losses are added back to the net income because they:
-Were ___________ in the deriving net income
-Do not require an ____________ of cash

Answer 1

Depreciation expense and losses are added back to net income because they were subtracted in deriving net income and do not require an outflow of cash.

Step-by-step explanation:

Depreciation expense and losses are added back to the net income because they:

1. Were subtracted in the deriving net income
2. Do not require an outflow of cash