Depreciation causes operating cash ﬂow to differ from net income.

Name: Depreciation causes operating cash ﬂow to differ from net income.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Depreciation is a non-cash expense that reduces net income but does not involve an actual outflow of cash. This means that operating cash flow will be higher than net income because it does not consider the non-cash expenses such as depreciation.

Depreciation Causes Operating Cash ﬂOw to Differ from Net Income