People Tab Window Help Zusuructions w Instructions Question 11 5 pts Which of the following describes the reasoning behind the treatment of depreciation expense when preparing the statement of cash flows using the indirect method: Depreciation expense represents cash saved for future purchases of equipment and therefore t must be subtracted from net income under the indirect method. Depreciation expense is initially subtracted from revenues to determine accrual basis net incare but does not affect cash. It is added back to net income in order to convert net income to li con basis. Since depreciation expense is added to determine net income, it should be subtracted when adjusting net income under the indirect method. Depreciation expense represents cash received and therefore should be added to net income 4 Previous 2st checked at 1:30am