Depreciation has the same effect on cash flows as it does on the income statement.

Name: Depreciation has the same effect on cash flows as it does on the income statement.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Depreciation is a non-cash expense that is added back to net income on the cash flow statement, so it does not directly impact cash flows. However, it does reduce taxable income and therefore may have an indirect effect on cash flows through tax savings.

Depreciation Has the Same Effect on Cash Flows as It