The statement of cash flows is prepared for analysis and reporting purposes of cash transactions of a company during the period. It mainly uses three sections for reporting cash inflows and outflows, namely cash flows from operating, investing and financing activities respectively. Being depreciation charged on fixed assets is adjusted for obtaining net income or loss for the period in books of accounts, can the same form a part of cash inflows or outflows on the statement of cash flows for such company?

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Chapter 16, Problem 11DQ

To determine

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The statement of cash flows is prepared for analysis and reporting purposes of cash transactions of a company during the period. It mainly uses three sections for reporting cash inflows and outflows, namely cash flows from operating, investing and financing activities respectively.

Being depreciation charged on fixed assets is adjusted for obtaining net income or loss for the period in books of accounts, can the same form a part of cash inflows or outflows on the statement of cash flows for such company?

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