Which One of the Following Statements Related to an Income

Multiple Choice

Which one of the following statements related to an income statement is correct?

A) Interest expense increases the amount of tax due.
B) Depreciation does not affect taxes since it is a non-cash expense.
C) Net income is distributed to dividends and paid-in surplus.
D) Taxes reduce both net income and operating cash flow.
E) Interest expense is included in operating cash flow.