Accounting for IGCSE & O level - Accounting Procedures (Section 2 - No. 15)
What is the effect of depreciation on the statement of cash flows?
It is added back to net income in the operating activities section.
It is deducted from net income in the operating activities section.
It has no effect on the statement of cash flows.
It is used in the investing activities section.
Explanation
Depreciation is added back to net income in the operating activities section because it is a non-cash expense.
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