Depreciation affects profit in which of the following ways?
A) Decreases profit, because it decreases a non-current asset.
B) Increases profit, because it is an acquisition of a non-current asset.
C) Profit decreases, because depreciation is an expense item.
D) Profit does not change, because depreciation is a non-cash expense.

Question

Quizplus · Accepted Answer

Depreciation is an expense item, which means it reduces the profit of a company. This is because depreciation represents the decrease in the value of a non-current asset over time.

Depreciation Affects Profit in Which of the Following Ways