Depreciation Expense on Statement of Cash Flows: True or False?

a. True

Depreciation expense does not appear on the statement of cash flows because it is a noncash expense. This means that no actual cash is paid out when depreciation is recorded. Instead, it is a way to account for the gradual decline in value of an asset over time. The statement of cash flows focuses on actual cash inflows and outflows, making depreciation irrelevant in its calculation.