Which of the following statements is false?
A) The only cash effect for depreciation is the tax savings provided by its deduction to derive taxable income.
B) Depreciation is a non-cash expense that reduces profit but involves no outflow of cash.
C) Depreciation expense is included in the investing activities section of the cash flow statement.
D) Depreciation expense is added to profit in the operating activities section of the statement of cash flows because it had no cash effect on profit under the indirect method.

Question

Quizplus · Accepted Answer

Depreciation expense is not included in the investing activities section of the cash flow statement as it is a non-cash expense that does not involve any investing activities. Instead, it is included in the operating activities section as it affects the calculation of net income.

Which of the Following Statements Is False