Depreciation expense does not cause a cash outﬂow for the current period; therefore, it should never be shown on the statement of cash ﬂows.

Question

Quizplus · Accepted Answer

Depreciation expense does not involve a cash outflow in the current period, but it does reduce the value of assets on the balance sheet. As a result, it is included in the operating section of the statement of cash flows as a non-cash expense.

Depreciation Expense Does Not Cause a Cash Outﬂow for the Current