Depreciation expense,as computed for financial reporting,has a direct effect on a corporation's cash flow.

Question

Quizplus · Accepted Answer

Depreciation expense for financial reporting is a non-cash expense and does not affect a corporation's cash flow directly. It is only used to reduce the value of fixed assets over time, which in turn affects the net income or profit of the company. However, there are other types of depreciation, such as tax depreciation, that can have an indirect effect on cash flow by reducing the amount of taxes a company has to pay.

Depreciation Expense,as Computed for Financial Reporting,has a Direct Effect on a Corporation's