Amortization is non cash expense that increases cash flow because:
A) love is not a factor in cash flows except in Italy.
B) any expenses that do not use cash will increase the effective net income on the balance sheet.
C) it can be classified as a prepaid expense.
D) it decreases taxes payable.

Question

Quizplus · Accepted Answer

Amortization is a non-cash expense that reduces the taxable income of a company. Since it lowers the amount of income subject to taxes, it effectively decreases the taxes payable, thereby increasing the cash flow available to the business.

Amortization Is Non Cash Expense That Increases Cash Flow Because