Which of the following is the effect of depreciation being recorded by a company?
A) Its cash flow decreases.
B) Its net income decreases.
C) Its quick assets decrease.
D) Its common stock increases.

Question

Which of the following is the effect of depreciation being recorded by a company?​
A) ​Its cash flow decreases.
B) ​Its net income decreases.
C) ​Its quick assets decrease.
D) ​Its common stock increases.

Quizplus · Accepted Answer

Depreciation is a non-cash expense that is recorded to reflect the decrease in the value of fixed assets over time. It reduces the company's net income by reducing its taxable income. However, it does not affect the company's cash flow, quick assets, or common stock.

Which of the Following Is the Effect of Depreciation Being