Question

When preparing the statement of cash flow using the indirect method, Depreciation Expense is ______. Multiple choice question. subtracted net income under the financing activities section subtracted from net income under the operating activities section added back to net income under the financing activities section added back to net income under the operating activities section

Answer 1

When preparing the statement of cash flow using the indirect method, Depreciation Expense is  Added back to net income under the operating activities.

What is the indirect method for a cash flow statement?

The indirect method for a cash flow statement  serves as one of the methods that helps in the  presentation of data  which can be used to display  the expenditure of a  company during a certain period .

This method  takes the company's net income , then perform addition or subtraction  on balance sheet items to determine cash flow.  

hence, When preparing the statement of cash flow using the indirect method, Depreciation Expense is  Added back to net income under the operating activities.

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