How is depreciation expense reported on the statement of cash flows?
What will be an ideal response?
Depreciation expense is not included on the statement of cash flows when using the direct method. Because noncash expenses are deducted in determining net income, they must be added to net income when computing net cash flow from operating activities using the indirect method.
The calculation of accrual-based net income frequently includes noncash expenses such as depreciation expense.
You might also like to view...
When revising for digital formats, what should receive special attention during the revision process?
A) Audience needs B) Audience location C) Headings and subheading D) Spelling, grammar and clarity E) Use of compatible technology
Answer the following statements true (T) or false (F)
1) Internal control is an organizational plan that ensures that the financial statements are prepared and submitted on time. 2) Controlling operations is a key responsibility of a business manager. 3) It is important for a business to identify policies which ensure that all customers are treated similarly and that results can be measured effectively. 4) Promoting operational efficiency reduces expenses and business profits. 5) If a company does not protect its assets, it is throwing away resources.
Which of the following is an example of an investing activity?
A) Purchasing a building B) Paying off a loan C) Employing workers D) Producing goods and services
Dirk required surgery for a kidney impairment. His total bill for medical services was $50,000. Dirk has a medical expense policy with a $1,000 calendar-year deductible and a $5,000 annual out-of-pocket limit
His coinsurance percentage is 20 percent. The out-of-pocket limit applies to coinsurance only. Assuming this surgery and hospitalization were the first medical care that Dirk received during the year and that all of the hospital services were eligible for coverage under the policy, how much of the $50,000 bill will the insurer pay? A) $39,000 B) $39,200 C) $40,000 D) $44,000