Calculation of cash flow from operations treats depreciation

Reference no: EM13141128

On a statement of cash flows that uses the indirect approach, calculation of cash flow from operations treats depreciation as an adjustment to reported net income because:

a) depreciation is a direct source of cash

b) depreciation is an outflow of cash to a reserve account for the replacement of assets

c) depreciation reduces net income and involves an outflow of cash

d) depreciation reduces net income but does not involve an outflow of cash

Reference no: EM13141128

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