Team Shirts, Inc. reported $5,000 of depreciation expense for the year. How is this amount reported on the statement of cash flows prepared using the indirect method and the direct method?
What will be an ideal response?
The $5,000 would be added to net income in the operating activities section of the statement of cash flows using the indirect method. Depreciation expense does not appear in the operating activities section when the direct method is used.
Business
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