Depreciation ____.
A) does not affect cash flows
B) does not affect profits
C) is not a cash outflow
D) is a cash inflow

Name: Depreciation ____. A) does not affect cash flows B) does not affect profits C) is not a cash outflow D) is a cash inflow
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Question

Quizplus · Accepted Answer

Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life and is not a cash outflow. It reduces taxable income, thus affecting profits, but it does not involve actual cash movement.