Question: Under the indirect method of preparing a statement of cash
Under the indirect method of preparing a statement of cash ﬂows, why is depreciation expense added to net income when determining net cash ﬂow from operating activities?
Answer to relevant QuestionsUnder the indirect method of preparing a statement of cash ﬂows, why do gains and losses affect net income when determining net cash ﬂow from operating activities? Why would an operating cash ﬂow ratio be more informative than a current or quick ratio for solvency or liquidity information? Saliba Corp. had beginning and ending balances in Salaries Payable of, respectively, $5,340 and $4,479. Saliba’s income statement for 2009 showed Salaries Expense of $119,835. Required: (a) Why would Saliba Corp. have a ...Following are classiﬁcations for items that may appear on a statement of cash ﬂows prepared on an indirect basis: (1) Cash inﬂow from operating activities (2) Cash outﬂow from operating activities (3) Cash inﬂow ...Following are the sections of a statement of cash ﬂows: • Operating activities • Financing activities • Investing activities Required: For each of the following line items included in recent statements of cash ﬂows ...
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