Which of the following is NOT a cash flow category?

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Study for the ASIS Protection of Assets (POA) Security Management Exam. Prepare with multiple choice questions, explanations, and insights. Get ready to excel in your exam!

Multiple Choice

Which of the following is NOT a cash flow category?

Explanation:
Cash flow statements separate cash movements into three main activities: operating, investing, and financing. Depreciation, however, is a non-cash expense that reduces accounting profit but does not involve an actual cash outflow when it’s recorded. Because categories reflect real cash movements, there isn’t a separate “depreciation cash flow” line. Instead, depreciation is added back to net income when computing cash flow from operating activities (especially in the indirect method). So depreciation cash flow isn’t a recognized cash flow category.

Cash flow statements separate cash movements into three main activities: operating, investing, and financing. Depreciation, however, is a non-cash expense that reduces accounting profit but does not involve an actual cash outflow when it’s recorded. Because categories reflect real cash movements, there isn’t a separate “depreciation cash flow” line. Instead, depreciation is added back to net income when computing cash flow from operating activities (especially in the indirect method). So depreciation cash flow isn’t a recognized cash flow category.

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