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Klio2033 [76]
3 years ago
13

The statement of cash flows (indirect method) reports depreciation expense as an addition to net income because depreciation

Business
1 answer:
dalvyx [7]3 years ago
5 0

Answer: B. reduces reported net income of the period but does not involve an outflow of cash for that period.

Explanation:

Depreciation is the wear and tear of an asset due to the use of the asset. When an asset is depreciated, such an asset is eventually sold at a scrap value.

The statement of cash flows (indirect method) reports depreciation expense as an addition to net income because depreciation reduces reported net income of the period but does not involve an outflow of cash for that period.

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