In a Statement of Cash Flows (Indirect Method), Depreciation Is

Multiple Choice

In a statement of cash flows (indirect method) , depreciation is treated as an adjustment to reported net income because depreciation

A) reduces the reported net income but does not involve an outflow of cash.
B) reduces the reported net income and involves an inflow of cash.
C) is an inflow of cash to a reserve account for asset replacement.
D) usually represents a significant portion of operating expenses.