What effect does this journal entry have on cash flows?
Dr Depreciation expense $88 200
Cr Accumulated depreciation $88 200

Question

Quizplus · Accepted Answer

This journal entry has no effect on either outflows or inflows because it is a non-cash transaction. Depreciation expense is an accounting entry that is used to allocate the cost of a fixed asset over its useful life. It does not involve any actual cash payments, so it does not affect the cash flows of the business.

What Effect Does This Journal Entry Have on Cash Flows