Adjusting entries to record depreciation expense increase operating expenses and reduce net income but do not require an outflow of cash.

Question

Quizplus · Accepted Answer

This is true. Adjusting entries for depreciation expense recognize the decline in the value of assets over time, which increases operating expenses and reduces net income, but no cash outflow is required as these entries only affect the accounting records.

Adjusting Entries to Record Depreciation Expense Increase Operating Expenses and Reduce