Step 1 of reconciling net income to net cash flow from operating activities is to a. add gains or subtract losses from investing activities. b. subtract gains or add losses from investing activities. c. subtract depreciation expense. d. add depreciation expense.

Question

Rosa Craig

Business

22 June, 05:32

Step 1 of reconciling net income to net cash flow from operating activities is to a. add gains or subtract losses from investing activities. b. subtract gains or add losses from investing activities. c. subtract depreciation expense. d. add depreciation expense.

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Answers (1)

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Moises Berger · Answer 1

d. add depreciation expense.

Explanation:

The first step is adding back non cash expense like depreciation, after that all non cash incomes shall be deducted as unrealized gain from change in foreign currency rates, after that there is treatment of gains and losses from investing activities.

Gains from investing activities are deducted, and losses from investing activities are added back, but it is a later step,

First step is of depreciation.