Explain why, under the indirect method, depreciation is added to the net income to calculate the cash

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Explain why, under the indirect method, depreciation is added to the net income to calculate the cash flow from operations. Is depreciation a source of cash, as this treatment seems to suggest?

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Understanding Financial Accounting

ISBN: 978-1118849385

1st Canadian Edition

Authors: Christopher Burnley, Robert Hoskin, Maureen Fizzell, Donald

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Question Posted: Jun 11, 2015 06:44 AM

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Explain why, under the indirect method, depreciation is added to the net income to calculate the cash

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Depreciation is added back to net income under the indirect method because we ar...View the full answer

Understanding Financial Accounting

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