[Dog1937]

Have a question about the following...

Which one of the following statements is not true about statements of cash flows prepared according to U.S. GAAP?

A. The operating section of the indirect method starts with the net income of the period
B. In the indirect method statement, the period's depreciation is added to net income because it is a source of cash
C. Interest payments are included in the operating section of the direct method statement
D. The investing section of the direct method statement for a period is identical to the investing section of the indirect method statement for the same period

I believe the answer is B, however I am a bit stuck. Any help would be appreciated.

[rehmanvohra]

A. The operating section of the indirect method starts with the net income of the period - Correct
B. In the indirect method statement, the period's depreciation is added to net income because it is a source of cash - Incorrect depreciation does not involve movement of cash
C. Interest payments are included in the operating section of the direct method statement - Correct
D. The investing section of the direct method statement for a period is identical to the investing section of the indirect method statement for the same period - Correct