Explain why, under the indirect approach, depreciation is added to the net earnings to calculate the cash

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

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Financial Accounting A User Perspective

ISBN: 978-0470676608

6th Canadian Edition

Authors: Robert E Hoskin, Maureen R Fizzell, Donald C Cherry

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Question Posted: Dec 23, 2015 08:20 AM

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Explain why, under the indirect approach, depreciation is added to the net earnings to calculate the cash

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The reason for adding back the depreciation is to correct for the fact that depreciation wh...View the full answer

Financial Accounting A User Perspective

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