Depreciation:
A)reduces both the net fixed assets and the costs of a firm.
B)is a non-cash expense that is recorded on the income statement.
C)is a non-cash expense which decreases the net operating income.
D)decreases net fixed assets, net income, and operating cash flows.
E)increases the net fixed assets as shown on the balance sheet.

Question

Quizplus · Accepted Answer

Depreciation is a non-cash expense that is recorded on the income statement. It does not affect the amount of cash a firm has, but instead reduces the value of assets over time as they wear out or become obsolete.