In the statement of cash flows using indirect method, depreciation is treated as an adjustment to reported profit because depreciation a. reduces the reported profit and involves an outflow of cash. b. reduces the reported profit but does not involves an outflow of cash. c. is an outflow of cash for asset replacement d. represent a significant portion of operating expense
In the statement of cash flows using indirect method, depreciation is treated as an adjustment to reported profit because depreciation a. reduces the reported profit and involves an outflow of cash. b. reduces the reported profit but does not involves an outflow of cash. c. is an outflow of cash for asset replacement d. represent a significant portion of operating expense
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter14: Statement Of Cash Flows
Section: Chapter Questions
Problem 11MCQ: The gain on sale of equipment is deducted from net income to arrive at operating cash flows because...
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In the statement of cash flows using indirect method, depreciation is treated as an adjustment to reported profit because depreciation
a. reduces the reported profit and involves an outflow of cash.
b. reduces the reported profit but does not involves an outflow of cash.
c. is an outflow of cash for asset replacement
d. represent a significant portion of operating expense
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