In Creating a Statement of Cash Flows Using the Indirect

Multiple Choice

In creating a statement of cash flows using the indirect method, which of the following statements is TRUE about depreciation expense?

A) It is added back as an adjustment to net income in the operating activities section.
B) It is shown as a negative cash flow in the investing activities section.
C) It is added back to purchases of plant assets under investing activities.
D) It is shown as a negative cash flow under operating activities.